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BOLMOD – simulating tax and benefit policies for development in Bolivia
The BOLMOD model is freely accessible for non-commercial research use but input data has to be manually constructed. Access to the model and the Stata do-files necessary to produce the underpinning input data set for the model can be requested here.
BOLMOD, the tax-benefit microsimulation model for Bolivia, is a highly versatile yet easy-to-use tool for policymakers and researchers alike. It allows the user to analyse and compare the effects of different benefit policy scenarios on poverty, inequality, and government revenues. The model applies user-defined tax and benefit policy rules to micro-data on individuals and households and calculates the effects of these rules on household income.
With BOLMOD, users can simulate reforms of the Bolivian tax and benefit system. They can estimate, for example, the number of beneficiaries and analyse the characteristics of the prospective recipients of a hypothetical benefit. BOLMOD also allows users to implement hypothetical income tax and social security reforms and calculate their effects on inequality and the government budget within the scope of the available data. Existing policies or past policy reforms can be evaluated as well.
BOLMOD can answer for example following questions:
- Which types of social policies could improve the living conditions of vulnerable populations?
- What policies can be adopted to increase the social security coverage of workers in the production sector?
- How much would such policies cost?
- How would a change in the targeting strategy of social policies impact poverty and inequality among vulnerable population groups?
- How could tax rates be increased to offset the additional expenditures on social protection?
Possible policy reform simulations in BOLMOD include for example:
- changes to the main social policies: Renta Dignidad (benefit for the elderly), Juana Azurduy Program (bond aimed at mother and child), and Bono Juancito Pinto (bond aimed at education)
- changes to the current tax policies aimed at improving progressiveness
- a Universal Basic Income
However, the model allows the simulation of a multitude of other policies and policy reforms as well. In addition to different taxes and social insurance contributions, BOLMOD contains an old age pension, education, maternity and child bonds, and a number of policies related to COVID-19.
BOLMOD has been developed and updated by Cristina Arancibia and David Macas from the BOLMOD team in collaboration with UNU-WIDER and Xavier Jara from the International Inequalities Institute at the London School of Economics and Political Science. The latest version of BOLMOD is based on the National Household Survey (Encuesta de Hogares EH) 2019 and 2020, allowing for representative results at the national level. Policies are simulated for the years 2019–2023.