A simulation model of the economic and social costs of poverty



This research project financed by the research program Poverty and Social Exclusion has led to the development of population-based, accounting, dynamic and behavioural microsimulation models that make it possible to estimate the costs of poverty and to calculate the costs and benefits of the fight against poverty, in a variety of dimensions.

The modelling takes into account the institutional, economic and social conditions specific to Québec. The exercise also benefitted from the recent availability of longitudinal Canadian data and the expertise acquired in recent years by the members of the research team. Simulations of the effect of various public policy scenarios on poverty and social exclusion were also produced. As a result of this exercise, Québec now has tools adapted to the Québec context for estimating the costs of poverty and for simulating the impact of the costs and benefits of the fight against poverty.

Québec now has adapted tools for estimating the costs of poverty.

This report has two main objectives. On the one hand, it aims to present the models developed in the context of the Concerted Action. On the other hand, it seeks to illustrate the relevance of these models by presenting some of the results obtained from three simulations. These simulations allow us to evaluate the impact of changes to existing or prospective public policy on different economic and social indicators, making it possible to capture several aspects of the costs of poverty.

The three simulations presented in this report pertain to education: (1) the impact of reducing school dropout rates is presented in the "Results" section of this report, while (2) the impact of varying the determinants of the intergenerational transmission of education and (3) the impact of an increase in the rate of return on education among immigrants are presented in the appendices. In all three cases, the model predicts significant repercussions on individual income, aggregate income, public finances and quality of life.

Main researcher

Jean-Yves Duclos, Université Laval

Summary

Research report

Appendices

Call for proposals

Deposit of the research report: January 2015