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SOUTHMOD family extended

How would progressive income taxation affect income inequality in Bolivia? What are the costs and benefits of implementing a state pension in Colombia? Which social protection policies reduce income poverty in Peru? In addition to the nine pre-existing countries with their own tailored tax-benefit microsimulation models, the SOUTHMOD model family now also includes Bolivia, Colombia and Peru.

Initiated in 2018, the three new models represent the first set of cross-country comparable and publicly available microsimulation models for Latin America, together with the model for Ecuador. In the same year, UNU-WIDER organized a conference on Income redistribution and the role of tax-benefit systems in Latin America, together with the national team of Ecuador, whose ECUAMOD model has been part of the SOUTHMOD project since 2016.

Since 2020, the SOUTHMOD project has served as a collaborative partner for the project, intensifying the links, exchanging information, and facilitating research using the models. This collaboration now culminates in the inclusion of the three new Latin American models into the SOUTHMOD family and into the harmonized, cross-country comparable SOUTHMOD model bundle.

Meet the teams behind these models:

BOLMOD

Cristina Arancibia

Cristina studied development economics at the Facultad Latinoamericana de Ciencias Sociales (FLACSO) in Ecuador, which is the partnering organization for the ECUAMOD model. Cristina has served as an economist at the Ministry of Economy and Public Finance of Bolivia, and her work has been awarded by the Central Bank of Bolivia in 2016 and 2020. She has been working on the development and maintenance of the Bolivian microsimulation model since 2017.

‘In my opinion, policy decisions must be transparent and backed by evidence. Microsimulation models, such as BOLMOD, are a key part of building evidence on social policy issues, for example, indicating which types of social policies could improve the living conditions of vulnerable populations or how Bolivia could adopt changes to the current tax policies aimed at improving progressivity.’

David Macas

David also holds a Master’s degree in development economics from FLACSO Ecuador.  David’s research interests and expertise include microeconomics, behavioral economics, environmental economics, and urban economics. Despite having always worked in the private sector, David is interested in studying issues related to the enactment of public policies and broadening his technical and methodological skills.

‘I think this model is really helpful in estimating the effects of policies before and after they are enacted in the country, which provides an opportunity to improve policy design and application.’

COLMOD

David Rodríguez

David is the COLMOD team leader at the Faculty of Economics at Universidad Externado de Colombia. He holds a PhD in Economics from the University of Essex in the United Kingdom, an MSc in Economics from the University of Southampton in the United Kingdom, and he is an Economist from Universidad Externado de Colombia.

David has more than 10 years of experience as a researcher and consultant on labor economics, distributive incidence of taxes and benefits to households, and micro-based macroeconomic models.

David developed COLMOD as part of his PhD. The first version was completed in 2017.

‘Since 2019, the model is hosted at Externado and we have been updating and producing research for Colombia and Latin America based on COLMOD. I am extremely glad that the model is now part of the SOUTHMOD family. I am sure the model will contribute to our understanding of development in a comparative manner.’

‘Our research has already informed the Congress of Colombia on the potential results of policy proposals, for instance, in relation to the extension of COVID-19 emergency benefits or the 2022 tax reforms.’

Mateo Zapata

Mateo is an Economist from Externado with two years of experience in teaching and economic research, specializing in labour markets, gender gaps, and analysis of redistributive public policies. He has worked with COLMOD for 1.5 years. His current research work with the model includes exploring the effects of a child benefit in Colombia.

‘The common language and modelling conventions of SOUTHMOD and EUROMOD allow us to analyse some of the most important policies worldwide in our country. By doing so, it is possible to take the examples from those policies with the greatest impact on inequality and poverty and implement them in our country, always taking into account the socioeconomic differences of the compared countries.’

Santiago Rojas

Santiago is an economist with two years of experience as a researcher and assistant lecturer. His main interests include public policy, economics of crime, and microsimulation models of taxes and benefits.

Santiago has been part of the COLMOD team for the last two years. He is currently exploring the distributional effect of taxes and subsidies to utilities in Colombia.

‘In the political context of Colombia, where the new government is proposing many changes, tools such as COLMOD are very useful for policymakers and academia to assess the impact of the reforms on poverty and income distribution.’

PERUMOD

Javier Torres Gomez

Javier holds a PhD in economics from the University of British Columbia, Canada. He is currently an Associate Professor at Universidad del Pacifico, working on topics such as labour, development, and political economy. He has been part of a team that studied the distributional and revenue effects of imposing personal income tax systems from other countries to the Latin America. He has been working with microsimulation models for over five years.

‘PERUMOD can be used as a first step in the analysis of competing reforms in the tax system. For instance, a change in the threshold of exempted income.’

Rodrigo Chang

Rodrigo is currently pursuing a master’s degree in economics for public policy at the Barcelona School of Economics. Prior to this, he was working at the research center of the Universidad del Pacífico, in Peru.

‘One recent example of the usefulness of the PERUMOD model is the assessment of the effects of cash transfers during COVID-19.'

Moving forward

The development and use of the three models for Bolivia, Colombia and Peru is coordinated by Dr Xavier Jara from the International Inequalities Institute (III) at the London School of Economics and Political Science (LSE). The III joined the SOUTHMOD project in 2022. Dr Jara is a long-term collaborator of SOUTHMOD and also the current coordinator of ECUAMOD, the tax-benefit microsimulation model for Ecuador.

Moving forward, the national teams of the three new Latin American country models will continue to facilitate the use of these models for academic research and policy analysis, and build capacity in the host countries. With the III, the national teams will play a key role in organizing regular training for local researchers and policymakers in Latin America to expand the network of microsimulation users. The ultimate goal is to foster decision-making for inclusive taxation and social protection on the continent.

The views expressed in this piece are those of the author(s), and do not necessarily reflect the views of the Institute or the United Nations University, nor the programme/project donors.