Research project AG/DD/30 (Research action AG)
Public Institution benefiting from the support measure: Ministry of Finance.
The Studies Department of the Ministry of Finance is now responsible for maintaining and updating an individual database on household income. This database was formerly under the responsibility of the 'Resource Centre on Taxation' in the previous 'Public economics' research program. This database is based upon the declarations for the individual tax and upon the automatic calculation of the taxable income and the taxation.
From 1991 onwards, successive databases of this kind were constituted, but they never took the form of a panel: they were based upon independent samples. From 1995 onwards, the databases (the most recent concerns the year 1996) also include a sample of non-enrolled tax payers, which together with the other samples give a comprehensive view of the whole population. These latter databases will be made accessible to external users under the Agora framework. The present project consists in the linkage of the data on individual income with those on household budget survey by a statistical matching method.
The integration of the two databases offers the following advantages:
- households' expenses will be integrated to data on their income;
- categories of income which were not subject to taxation will be taken into account in the analysis (e.g. financial incomes);
- a coherent database will be obtained which includes direct and indirect taxation information.
The new database should take the following elements into account:
- the reference periods differ in the two databases;
- the size of the samples are different in both databases;
- the concept of household also differ from one database to the other.
Therefore, the objective of the support measure will be the creation of a statistical matching algorithm, a product that will be reused by the Ministry of Finance. This matching algorithm should allow the creation of a single database integrating information on households income on the one hand and on households expenses on the other hand. This database should be accurate enough to shed light on the variables upon which fiscal policies are based, in terms of direct and indirect taxation.
External users interested in the final product are essentially university centres. They could make good use of it as an input for their micro-simulation models on specific fiscal topics. Being based on individual data, the database will only be made accessible to the public on strict privacy protection procedures, as it has been the case in the past.
This pilot-project will be made permanent thanks to the Agora-project « Permanent matching of income/expenditures and modeling » (AG/FF/079).
