UNU-WIDER Launches Tax-Benefit Microsimulation Tool

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News
  • 2017•09•15     Addis Ababa

    Tax-benefit microsimulation models — which combine representative household-level data on incomes and expenditures and detailed coding of tax and benefit legislation — have proven to be an extremely useful tool for researchers and policymakers alike, in both developed and developing country contexts. The models enable researchers and policymakers to understand the effects of tax or benefit reforms on household income, and therefore on poverty and inequality. Such, models provide essential support for evidence-based policymaking.

    The UNU World Institute for Development Economics Research (UNU-WIDER) project SOUTHMOD — Simulating Tax and Benefit Policies for Development has built and updated microsimulation models for seven different developing countries. One of these is the Ethiopian tax and benefit microsimulation model (ETMOD).

    In July 2017, UNU-WIDER and the Ethiopian Development Research Institute (EDRI) — with support from the Southern African Social Policy Research Institute — organised an event to launch ETMOD, and introduced the model to stakeholders from various ministries and academic institutions in Ethiopia.

    Following the launch event, a three-day technical workshop was conducted to familiarise participants with the use of the tax-benefit system in general, and ETMOD in particular. Along with providing an overview of the model, a few examples of simulating policy reforms were introduced. The objective of the training was for the attendees to gain understanding of how to navigate and interpret the ETMOD user interface, how to run ETMOD, and how to use the model to simulate basic policy reforms.

    For more information, see the news story on the UNU-WIDER website.