New Tax-benefit Micro-simulation Model

EDRI and UNU-WIDER launch a New Tax-benefit Micro-simulation Model for Ethiopia (ETMOD)

Ethiopian Development Research Institute (EDRI) and United Nations University-World Institute for Development Economics Research (UNU-WIDER) held a workshop that focused on the launching and provision of training on a new tax-benefit micro-simulation programme for Ethiopia (ETMOD) at the United Nation’s Economic Commission for Africa (UN ECA) conference room in Addis Ababa, Ethiopia from the 11th to the 13th of July 2017. 

In the occasion, Andualem Telaye (Ph.D.), Senior Researcher at EDRI, Kati Hirvonen and David McLennan (Ph.D.) from UNU-WIDER made presentations that emphasized on giving a brief background to and an overview of ETMOD to the potential users of the model in Ethiopia.

In the presentations, it was disclosed that ETMOD has been developed under the UNU-WIDER SOUTHMOD project, in collaboration with Ethiopian Development Research Institute (ERI), University of Essex, and Department of economics at the University of Leuven. The tax-benefit micro-simulation 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 policy makers and researchers alike. The models apply user-defined tax and benefit policy rules to micro-data on individuals and households and calculate the effects of these rules on household income. As indicated in the presentations, the effects of different policy scenarios on poverty, inequality, and government revenues could be analysed and compared using such models.

Following the briefings about ETMOD, the participants were given a comprehensive training for two days. In the training sessions, attendees were provided with practical guidance on how to navigate and interpret the ETMOD user interface; how to run ETMOD; and how to build and implement a basic policy reform by Firew Bekele (Ph.D.) and Kiflu Degefe (Ph.D.), senior researchers at EDRI with David McLennan (Ph.D.)and Kati Hirvonen from UNU-WIDER. 

The three days’ workshop was attended by participants from Addis Ababa University, Ministry of Finance and Economic Cooperation (MoFEC), Ministry of Labour and Social Affairs (MoLSA), Ministry of Urban Development and Housing (MoUDH), National Planning commission (NPC) and Private Organization Employees Social Security Agency(POESSA) in Ethiopia.

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