The Policy Simulation Model (PSM) is a static
microsimulation
Microsimulation is the use of computerized analytical tools to perform analysis of activities such as highway traffic flowing through an intersection, financial transactions, or pathogens spreading disease through a population on the granularity ...
model
A model is an informative representation of an object, person, or system. The term originally denoted the plans of a building in late 16th-century English, and derived via French and Italian ultimately from Latin , .
Models can be divided in ...
which encapsulates the tax and benefits system, and population, of Great Britain.
It is based on survey data from the
Family Resources Survey (FRS) which is uprated to simulate the current year, together with several years into the future through a process of static uprating. The uprating process covers a complex range of processes, ranging from simple numerical uprating of financial values, to modelling the draw-down of old benefits through to the implications of the rising state pension age.
The model is built using
SAS and is owned by the GB
Department for Work and Pensions
The Department for Work and Pensions (DWP) is a Departments of the Government of the United Kingdom, ministerial department of the Government of the United Kingdom. It is responsible for welfare spending, welfare, pensions and child maintenance ...
(DWP). It produces outputs including the financial (and work-incentive) impacts on a representative sample of the GB population from hypothetical policy changes to the tax and benefits system.
It is managed by a central team of analysts who both develop the model and provide year-round customer service to analytical users of the model spread across the DWP corporate centre. It is used for poverty and scenario analysis associated with the development of new policies, including
Universal Credit
Universal Credit is a United Kingdom based Welfare state in the United Kingdom, social security payment. It is Means test, means-tested and is replacing and combining six benefits, for working-age households with a low income: income-related Emp ...
.
See also
*
Pensim2, another model with the same ownership
*
TaxBen, the
IFS equivalent model
*
IGOTM, the
HMT equivalent model
References
External links
DWP homepage
Department for Work and Pensions
Microsimulation
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