Microsimulation

Statistics Finland develops, maintains and distributes the SISU microsimulation model that models the personal taxation and social security systems of Finland. The SISU model is a calculation tool intended for the planning, monitoring and assessing of personal taxation and social security legislation.

Microsimulation models have been used for quite some time now in Finland in the drafting of legislation on social security benefits and income taxation. Microsimulation models can be used to calculate from unit-level data on a sample representing the whole population the overall effects of legislative amendments on different types of households as well as the whole population.

The models are used to estimate tax revenues in the public sector, to examine the financial positions of individual persons and households, and to study income differentials and incentive effects.

The new model brings Finnish microsimulation to a completely new level in terms of usability and calculation accuracy. A new separate user interface was tailored for the model to enhance its usability. Calculation accuracy has improved along with the new larger data that better represent the population. The use of large register-based data is accessible via remote access. The aim is to increase the use of the model from before in research and for assessing policy alternatives, for example.

The model has been developed at Statistics Finland since 2011 in close co-operation with the Research Department of the Social Insurance Institution of Finland. The development work included also several experts from the Ministry of Finance, the Ministry of Social Affairs and Health, the National Institute for Health and Welfare, and the Government Institute for Economic Research.

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