Modelling the local impacts of national social policies: a spatial microsimulation approach

The aim of this paper is to provide a new framework for the analysis and the evaluation of national social policies at the small-area level. In particular, the paper shows how microsimulation modelling can be employed to shed new light on the local impacts of major national policy changes such as taxes, regulations, government consumption, unemployment benefits, job seekers' and housing allowances, etc. Microsimulation modelling provides the possibility of defining the desired effects of economic and social policy, the instruments employed, and also the structural changes of those affected by socioeconomic policy measures. This paper builds on traditional economic microsimulation frameworks by adding a geographical dimension. More specifically, we seek to model national social policy impacts at a microspatial scale. First, spatial microsimulation modelling is used to synthesise a household micropopulation geographical database for an entire city. This micropopulation database has a wide range of demographic and socioeconomic attributes that are relevant to national social and economic policies and which play a major role in the determination of eligibility of households for various benefits and allowances. GIS software is used to identify the size and spatial location of particular groups such as the unskilled, low-waged, and undereducated. Finally, we explore potential social policies and demonstrate how microsimulation modelling can be used to perform what-if social policy analysis at the small-area level.