Dr. Karina Doorley:

Dr. Keane can talk all day about administrative data and I can talk all day about SWITCH, so I will take this question. SWITCH has been in existence for approximately 30 years. Recently, we overhauled it completely. Basically, it is a giant tax benefit calculator that is linked to survey data from a representative sample of households. The current version of the model is linked to the 2016 survey on income and living conditions that the CSO provided to us. The survey included administrative information on welfare receipts by families. Using the survey's information on demographics, household composition, work history, income and so on, we can simulate families' tax and welfare entitlements. We can simulate the current income distribution because the SWITCH model programmes in all of the tax and welfare benefits that a particular household should be entitled to in light of everything we know about it from the survey.

We can also simulate counterfactuals. The model allows us to determine what would happen to income distribution if the tax rate was changed or all of budget 2022's changes were implemented. We use it a great deal in "What if" scenarios - what if this changed, what if that changed and how would it affect income distribution, poverty rates, income inequality, etc.

We update the model almost continuously but the data update usually happens every year. We introduced the 2019 data last year. It is unlikely that we will introduce 2020's data because they will be so skewed by the pandemic, but we have conducted a statistical procedure on the 2019 data to make them representative of the current population. It is called nowcasting, whereby we take into account employment and income levels in the current population and apply them to the rich survey information that we have. All of that is linked to the SWITCH model, which contains all the tax and welfare rules. The SWITCH model is based on a European platform called EUROMOD, which is used all over Europe in academia and policy circles for research and budget preparations.