Assessing the microeconomic returns of social protection expenditure

Led by Ecorys Polska, this project aimed to assess the micro and macro-economic returns of social protection expenditure. The Budapest Institute prepared a chapter summarizing how microsimulation can be used in quantifying returns to social spending, focusing especially on cash benefits and childcare that determine potential gains to work and through that, affect the labour supply of mothers. To illustrate the application of microsimulation to the analysis of these policies, we calculated how variously defined participation replacement rates may be affected by the design of childcare policies across selected countries. Using the calculated replacement rates, we modelled the probability of employment among women with small children in order to capture monetary incentives in the tax-benefit system. 

The study is available at the following via this link.

The Budapest Institute was subcontracted by Ecorys Polska for this task. The project was financed by DG Employment, Social Affairs and Inclusion.