Effects of changes in tax-transfer system on households income distribution in Bulgaria: simulation analysis using EUROMOD for 2011-2015
1 Jun 2016
The paper presents some empirical results about the assessment of the effects from tax-transfer policies on incomes of Bulgarian households for the period 2011-2015 obtained by EUROMOD – the tax-transfer simulation model of the EU – utilizing data from EU SILC survey. The simulation analysis was performed by tracking the changes in household income distribution for any year from the period where the policy parameters from the base year (2011) were replaced by those enacted for each year, holding the population structure and gross household market incomes fixed at the base year. The results show that the changes in the policies brought in income increments mainly for the households in the lowest income groups. Poverty rate decreases by 1.3-2.9 percentage points (depending on several levels experimented for the poverty threshold). Nevertheless, the poverty level in Bulgaria is among the highest in EU and special measures should be launched in order to enhance the living standard of Bulgarian households.