Nowcasting of poverty rate by microsimulation

Every year in September N+2, INSEE publishes the main poverty and standard of living indicators for year N. This delay is unsatisfactory for meeting the social requirements of those who use these indicators (media, public decision-makers). Of the 21 months between the end of the year under consideration and the publication of the poverty rate, about three-quarters of this time is taken up collecting tax and social data, and about one quarter with statistically matching from which the Tax and Social Incomes Survey (ERFS) is produced. The practice of nowcasting consists of producing an earlier indicator of the poverty rate for year N (in autumn N+1). The method to be used for this exercise is microsimulation, which creates individuals' standard of living by imputing benefits and contributions on scales, and thus it is possible to take account of any legal changes made to these measures. The exercise is based on the INES (INSEE-DREES) model, which simulates the majority of French social security and tax legislation from 1990, based on any year of the ERFS. Although in technical terms, microsimulation can meet this objective, we must now measure the quality of the early indicators thus produced. The purpose of this working document is therefore to look at periods in the past, and compare the results that would have been produced by microsimulation with those that were in fact disseminated from the ERFS, before reaching a decision on the relevance of nowcasting by microsimulation. In this document, some fiscal information that would not have been available in real conditions, has been used.