How to calculate input variables from prior periods’ states

Many taxes and transfers require inputs from prior periods to serve as inputs for this year’s calculations. For example, parental leave benefits often rely on an estimate of the claimant’s net income during the 12 months preceding the child’s birth.

You may see these values directly in your input data, in which case there is nothing to do beyond the usual procedure.

Often, however, you may see the state variables (in the example that would be gross income, marital status, etc.) and want to calculate the relevant values using GETTSIM in a previous year. This how-to guide explains how to do this.

General recipe

In general, follow this recipe to calculate these taxes and transfers:

1. Identify past inputs Determine which past inputs you need to calculate the taxes and transfers for the year you are interested in. These will always be input variables marked with @policy_input.

2. Calculate past inputs using panel data Each past input corresponds to a policy function you can target in a GETTSIM run. For instance, the input ("elterngeld", "zu_versteuerndes_einkommen_vorjahr_y_sn") can be derived by calling ("einkommensteuer", "zu_versteuerndes_einkommen_y_sn") for the year prior to the child’s birth. These connections, if present, are explained in the @policy_inputs’ docstrings.

3. Use past inputs for final calculation After computing the past values, include them among the inputs to the policy functions of interest to obtain the final tax or transfer amounts.

Examples

Below is a non-exhaustive list of taxes and transfers that require past inputs that can be calculated using GETTSIM, along with the specific policy functions that will do so.

Elterngeld (Parental Allowance)

For a thorough explanation on how to calculate Elterngeld, see the Elterngeld tutorial.

Pensions

Pensions are based on Entgeltpunkte (earnings points), which are calculated from lifetime earnings:

• Past inputs:

  • Since July 2023: ("sozialversicherung", "rente", "entgeltpunkte")

  • Before July 2023: ("sozialversicherung", "rente", "entgeltpunkte_west") and ("sozialversicherung", "rente", "entgeltpunkte_ost")

• Calculation targets:

  • Since July 2023: ("sozialversicherung", "rente", "entgeltpunkte_updated")

  • Before July 2023: ("sozialversicherung", "rente", "entgeltpunkte_updated_west") and ("sozialversicherung", "rente", "entgeltpunkte_updated_ost")

Unemployment benefits (Arbeitslosengeld)

Unemployment benefits are based on the income in the 12 months preceding the beginning of the unemployment spell:

• Historical input: ("arbeitslosengeld", "mean_nettoeinkommen_in_12_monaten_vor_arbeitslosigkeit_m")

• Calculation target: ("arbeitslosengeld", "mean_nettoeinkommen_für_bemessungsgrundlage_bei_arbeitslosigkeit_y")