-{"version":3,"kind":"Article","sha256":"c3463891d4f5fec2e36efb4cf687f03521982721c36ea9e06dbd32afe0381a63","slug":"background","location":"/background.md","dependencies":[],"frontmatter":{"title":"Background","content_includes_title":false,"authors":[{"nameParsed":{"given":"PolicyEngine","family":"Team","literal":"PolicyEngine Team"},"name":"PolicyEngine Team","id":"contributors-myst-generated-uid-0"}],"github":"https://github.com/policyengine/policyengine-us-data","copyright":"2024","source_url":"https://github.com/policyengine/policyengine-us-data/blob/main/docs/background.md","edit_url":"https://github.com/policyengine/policyengine-us-data/edit/main/docs/background.md","exports":[{"format":"md","filename":"background.md","url":"/policyengine-us-data/build/background-e3e85878ad0e25cb0a5fca3d0e5744b1.md"}]},"mdast":{"type":"root","children":[{"type":"block","children":[{"type":"heading","depth":2,"position":{"start":{"line":3,"column":1},"end":{"line":3,"column":1}},"children":[{"type":"text","value":"The Microsimulation Landscape","position":{"start":{"line":3,"column":1},"end":{"line":3,"column":1}},"key":"ZXnBEfyHtJ"}],"identifier":"the-microsimulation-landscape","label":"The Microsimulation Landscape","html_id":"the-microsimulation-landscape","implicit":true,"key":"gYT46DWPIf"},{"type":"paragraph","position":{"start":{"line":5,"column":1},"end":{"line":12,"column":1}},"children":[{"type":"text","value":"Tax and benefit microsimulation models play a role in policy analysis by projecting the\ndistributional and revenue impacts of proposed reforms. Institutions maintaining these models\ninclude government agencies like the Congressional Budget Office (CBO), Joint Committee on Taxation\n(JCT), and Treasury’s Office of Tax Analysis (OTA), as well as non-governmental organizations\nincluding the Urban-Brookings Tax Policy Center (TPC), Tax Foundation, Penn Wharton Budget Model\n(PWBM), Institute on Taxation and Economic Policy (ITEP), Yale Budget Lab, and the open-source\nPolicy Simulation Library (PSL). Each model serves specific institutional needs but faces common\ndata challenges.","position":{"start":{"line":5,"column":1},"end":{"line":5,"column":1}},"key":"VMsq4xTRIx"}],"key":"wxoV8y0MpE"},{"type":"paragraph","position":{"start":{"line":14,"column":1},"end":{"line":19,"column":1}},"children":[{"type":"text","value":"The core challenges these models face stem from the tradeoff between data comprehensiveness and\naccessibility. Administrative tax data provides income reporting but lacks the household context\nthat models need to analyze benefit programs and family-level impacts ","position":{"start":{"line":14,"column":1},"end":{"line":14,"column":1}},"key":"apzcgcEKjV"},{"type":"citeGroup","kind":"parenthetical","children":[{"type":"cite","kind":"parenthetical","label":"sabelhaus2020","identifier":"sabelhaus2020","children":[{"type":"text","value":"Sabelhaus & Johnson, 2020","key":"sZaq3CrB0m"}],"enumerator":"1","key":"Aq26xZVIO2"}],"key":"iuk0taxuCm"},{"type":"text","value":".\nSurvey data captures household relationships and program participation but suffers from income\nunderreporting that worsens at higher income levels ","position":{"start":{"line":14,"column":1},"end":{"line":14,"column":1}},"key":"L0V19K6NkY"},{"type":"citeGroup","kind":"parenthetical","children":[{"type":"cite","kind":"parenthetical","label":"meyer2021","identifier":"meyer2021","children":[{"type":"text","value":"Meyer ","key":"EXDwD19jpX"},{"type":"emphasis","children":[{"type":"text","value":"et al.","key":"mWL6YE9p0D"}],"key":"Gu5u5k69P9"},{"type":"text","value":", 2021","key":"UfmyDS9o9P"}],"enumerator":"2","key":"VYC0VUcvHz"}],"key":"TkE95eM7S4"},{"type":"text","value":". The need to protect\ntaxpayer privacy limits data availability because administrators cannot publicly release microdata.","position":{"start":{"line":14,"column":1},"end":{"line":14,"column":1}},"key":"VZ4HpcFOiT"}],"key":"jf6qw7A162"},{"type":"heading","depth":2,"position":{"start":{"line":21,"column":1},"end":{"line":21,"column":1}},"children":[{"type":"text","value":"Data Enhancement Approaches","position":{"start":{"line":21,"column":1},"end":{"line":21,"column":1}},"key":"zxRPLNQP66"}],"identifier":"data-enhancement-approaches","label":"Data Enhancement Approaches","html_id":"data-enhancement-approaches","implicit":true,"key":"RQfgcFmCot"},{"type":"paragraph","position":{"start":{"line":23,"column":1},"end":{"line":23,"column":1}},"children":[{"type":"text","value":"Different microsimulation models use various approaches to enhance their underlying data:","position":{"start":{"line":23,"column":1},"end":{"line":23,"column":1}},"key":"nTIERpoXht"}],"key":"e2k5A2pTf2"},{"type":"paragraph","position":{"start":{"line":25,"column":1},"end":{"line":28,"column":1}},"children":[{"type":"text","value":"Government models (CBO, JCT, Treasury) have access to confidential administrative data but cannot\nshare their enhanced microdata. Non-governmental models work with public data, leading to various\nenhancement strategies. Some organizations use proprietary extracts of tax returns, while others\nenhance survey data with various methods.","position":{"start":{"line":25,"column":1},"end":{"line":25,"column":1}},"key":"kUKuWXA3yu"}],"key":"wrUk4kU9CX"},{"type":"paragraph","position":{"start":{"line":30,"column":1},"end":{"line":32,"column":1}},"children":[{"type":"text","value":"Our enhanced dataset provides an open-source methodology with state identifiers and calibration to\nstate-level targets. This enables analysis of federal-state tax interactions. Researchers can use\nthe dataset with PolicyEngine or other microsimulation models.","position":{"start":{"line":30,"column":1},"end":{"line":30,"column":1}},"key":"arKTkQLgU3"}],"key":"B9CB6fbaYG"},{"type":"paragraph","position":{"start":{"line":34,"column":1},"end":{"line":37,"column":1}},"children":[{"type":"text","value":"The open-source nature promotes methodological transparency. The modular design allows researchers\nto substitute alternative imputation or calibration methods while maintaining the overall framework.\nRegular updates as new CPS and administrative data become available ensure the dataset remains\ncurrent.","position":{"start":{"line":34,"column":1},"end":{"line":34,"column":1}},"key":"V7Hq58rS44"}],"key":"C2epW7UsZz"}],"key":"nO5yjLTh6c"}],"key":"eigEHCPo5T"},"references":{"cite":{"order":["sabelhaus2020","meyer2021"],"data":{"sabelhaus2020":{"label":"sabelhaus2020","enumerator":"1","html":"Sabelhaus, J., & Johnson, D. (2020). Administrative Data and the Current Population Survey: A Systematic Review of Data Quality and Usage. <i>Journal of Economic and Social Measurement</i>, <i>45</i>(2), 95–120."},"meyer2021":{"label":"meyer2021","enumerator":"2","html":"Meyer, B. D., Wu, D., Finley, G., Langetieg, P., Payne, C., Plumley, A., & Yu, A. (2021). The Accuracy of Tax Imputations: Estimating Tax Liabilities and Credits Using Linked Survey and Administrative Data. <i>NBER Working Paper</i>, <i>28229</i>."}}}},"footer":{"navigation":{"prev":{"title":"Introduction","url":"/introduction","group":"PolicyEngine US Data"},"next":{"title":"Data Sources","url":"/data","group":"PolicyEngine US Data"}}},"domain":"http://localhost:3000"}
0 commit comments