SimulatorPlus
The instruments tested in detail
For the simulation, five typically discussed wealth policy instruments were compared in a micro-simulation model in terms of their distributional impact. The model calculates the extent to which each instrument changes the amount of wealth per household. The model also simulates how households respond to the policies in terms of their behaviour - and how additional wealth is subsequently created through savings behaviour or inheritance. Employment profiles are also modelled and households are differentiated according to demographic characteristics.
The model is based on the results of household surveys from the German Socio-Economic Panel (SOEP) at DIW Berlin. The researchers calculated how the concentration of wealth would change over ten years compared to a baseline scenario without measures - with a trend towards increasing inequality - if each of the selected instruments were implemented. The top ten per cent are considered to be the most wealthy; the second group is those holding between 50 and 90 per cent of the wealth; and the third group is the bottom 50 per cent. The evaluation focuses on the extent to which a measure slows down or reverses the trend increase in inequality.
The model simulations are therefore not designed to identify one instrument as indisputably the best. Rather, the calculations help to estimate the magnitude of different effects on the distribution of wealth. In this sense, they should help to objectify the debates about rich and poor in Germany.
The next stages of the project will include the development of a simulator that will enable users to estimate the impact of various measures on their own position in the distribution of wealth.