MIKMOD supports the Federal Ministry for Families, Elderly, Women and Youth (BMFSFJ) in diverse aspects of income taxation. Apart from the impacts of the income splitting between spouses (Ehegattensplitting) and the interaction between child allowance (Kinderfreibeträge) und child benefits (Kindergeld), the central items are taxable events that are relevant for families. For example, this includes extraordinary child care expenses and the taxable deduction of household-related services.
We use various methodological techniques to analyze relevant problems. The majority of issues is addressed by a microsimulation model that is based on an anonymized sample of the income tax statistics (Lohn-und Einkommenssteuerstatistik). Besides, we implement our own forecasting model, which the Federal Ministry of Finance (BMF) also uses for its tax appraisal, to compute the number of children that profit from child benefits. We supplement our calculations with statistical evaluations and projections that hinge on a variety of data sources such as the micro-census (Mikrozensus), the income and consumption survey (Einkommens- und Verbrauchsstichprobe) and the socio economic panel (Sozio-Ökonomisches Panel).
Parental Allowance (Elterngeld)
The parental allowance policy was introduced on 1st January 2007 in order to replace the child-raising allowance (Erziehungsgeld). The new policy intends to support families with young children after the period of maternity leave. Our team has been assisting the BMFSFJ both with the first draft and the subsequent analysis of its effectiveness from the very beginning in 2005. In order to predict the impacts of legislation amendments and reform proposals, a microsimulation model computes the ad hoc costs and compares them with the costs that would occur under the new law. Apart from the mere cost calculations, the distributive consequences of the reform can also be reenacted in detail. Hence, the microsimulation model allows us to identify the winners and losers of various legislation amendments as we did with our computations of the “parental allowance plus” policy, for example.
Since 2013, MIKMOD is provided with anonymized individual data on parental allowance earnings in Germany. These data allow us to both obtain differentiated information about the recipients of the allowance and to detect changes in its usage. Using all of this information, our team constructs forecasts about the development of the federal expenditures on the annual parental allowance that the BMFSFJ needs to regularly plan the federal budget.
Supplementary Child Allowance (Kinderzuschlag)
MIKMOD also supervises the supplementary child allowance policy. It intends to support families with children and to prevent them to be reliant upon social services according to the Social Security Code II (SGB II). On behalf of the BMFSFJ we carry out the following tasks:
Based on the data of the micro-census, our research group developed a complex microsimulation model to calculate reform effects of the supplementary child allowance policy. This does not only include routines for income calculations but also considers various interdependencies in the German Tax and Transfer System. Consequently, it is not merely possible to predict the economic impacts of an increase in the supplementary child allowance but also to illustrate the interaction between the SGB II and housing allowance (Wohngeld). In addition, the model allows us to determine the effects of reforms or changes in various benefits such as maintenance advance (Unterhaltsvorschuss) on the supplementary child allowance.
Besides, our research group is responsible for the long run budgeting of the supplementary child allowance. We use time series analysis to forecast the developments of the expenditures and compare and complement these with the results of our microsimulation model.
In order to illustrate the complex interdependencies between the supplementary child allowance and various other social benefits, MIKMOD uses a model that runs on an individual case basis to illustrate the reference pattern of the allowance graphically.
Maintenance Advance (Unterhaltsvorschuss)
MIKMOD also conducts evaluations and forecasts of the maintenance advance. This benefit is granted to a single father or mother if the other parent does not or only partially meet his or her maintenance obligations (Unterhaltsverpflichtungen). Our team predicts the effects of proposed reforms on expenditures and on the number of affected parents by evaluating the statistics of this benefit together with various other sources of microeconomic data that focus on maintenance advance such as SOEP, EVS or IAB-PASS.
Gender Equality Politics (Gleichstellungspolitik)
Furthermore, MIKMOD focuses on issues relating to gender equality politics. For example, our team developed the "Wiedereinstiegsrechner" – an online tool that helps women, who start to work again after their maternity leave, to determine their payment possibilities. The tool is based on comprehensive statistical evaluations and forecasts. Apart from that, we conduct investigations into equalization issues relating to household-related services or choice of tax bracket and implement statistical evaluations for the equalization report (Gleichstellungsbericht).