A Poverty Analysis Macroeconomic            Simulator (PAMS) Linking Household Surveys with Macro-Models

Pereira da Silva, Luiz A.; Essama-Nssah, B.; Samake, Issouf

A Poverty Analysis Macroeconomic Simulator (PAMS) Linking Household Surveys with Macro-Models

Autores

Pereira da Silva, Luiz A.

Essama-Nssah, B.

Samake, Issouf

Editor

World Bank, Washington, DC

Descripción

The Poverty Analysis Macroeconomic Simulator (PAMS) is a model that links standard household surveys with macro frameworks. It allows users to assess the effect of macroeconomic policies-in particular, those associated with Poverty Reduction Strategies papers-on sectoral employment and income, the incidence of poverty, and income distribution. PAMS (in Excel) has three interconnected components: (1) A standard aggregate macro-framework that can be taken from any macro-consistency model (for example, RMSM-X, 123) to project GDP, national accounts, the national budget, the BoP, price levels, and so on, in aggregate consistent accounts. (2) A labor market model breaking down labor categories by skill level and economic sectors whose production total is consistent with that of the macro framework. Individuals from the household surveys are grouped in representative groups of households defined by the labor category of the head of the household. For each labor category, labor demand depends on sectoral output and real wages. Wage income levels by economic sector and labor category can thus be determined. In addition, different income tax rates and different levels of budgetary transfers across labor categories can be added to wage income. (3) A model that uses the labor model results for each labor category to simulate the income growth for each individual inside its own group, assumed to be the average of its group. After projecting individual incomes, PAMS calculates the incidence of poverty and the inter-group inequality. PAMS can produce historical or counterfactual simulations of: + Alternative growth scenarios with different assumptions for inflation, fiscal, and current account balances. These simulations allow test tradeoffs within a macro stabilization program. + Different combinations of sectoral growth (agricultural or industrial, tradable or non-tradable goods sectors), within a given aggregate GDP growth rate. + Tax and budgetary transfer policies. For example, PAMS will simulate a baseline macro-scenario for Burkina Faso corresponding to an existing IMF/World Bank-supported program and introduce changes in tax, fiscal, and sectoral growth policies to reduce poverty and inequality more effectively than the base scenario. So, the authors argue that there are several possible "equilibria" in terms of poverty and inequality within the same macro framework.

Palabras clave

POVERTY ANALYSIS, MACROECONOMIC MODELS, HOUSEHOLD SURVEYS, MACROECONOMIC POLICY, POVERTY REDUCTION STRATEGIES, EMPLOYMENT ECONOMETRIC MODELS, INCOME ESTIMATES, POVERTY INCIDENCE, INCOME DISTRIBUTION, AGGREGATE VARIABILITY, NATIONAL ACCOUNTS, NATIONAL BUDGETS, PRICE STRUCTURES, LABOR MARKET ECONOMETRIC MODELS, LABOR DEMAND, WAGE LEVELS, ECONOMIC SECTORS, INCOME TAX LAW & LEGISLATION, FISCAL POLICY, SECTORAL ADJUSTMENT, TAXATION AGGREGATE LEVEL, AGGREGATE OUTPUT, AGRICULTURAL EXPORTS, AGRICULTURAL OUTPUT, AGRICULTURAL PRODUCTION, AGRICULTURAL SECTOR, AGRICULTURE, AVERAGE GROWTH, AVERAGE GROWTH RATE, BASE YEAR, BENCHMARKS, BUDGET CONSTRAINTS, BUSINESS ENVIRONMENT, CAPITAL FLOWS, CENTRAL PLANNING, CONCESSIONAL LENDING, COUNTRY CASE, DEBT, DEBT RELIEF, DECENTRALIZATION, DEVELOPED COUNTRIES, DEVELOPMENT ASSISTANCE, DEVELOPMENT ECONOMICS, DEVELOPMENT GOALS, DEVELOPMENT THEORY, DISTRIBUTIONAL CHANGE, DOMESTIC SAVINGS, ECONOMETRIC MODELS, ECONOMIC LITERATURE, ECONOMIC MANAGEMENT, ECONOMIC POLICIES, ECONOMIC SECTORS, ECONOMICS, ECONOMISTS, ELASTICITIES, ELASTICITY, EMPLOYMENT, EQUILIBRIUM, EXCHANGE RATE, EXCHANGE RATES, EXPENDITURES, EXPORTS, FUNCTIONAL FORM, GDP, GDP PER CAPITA, GENERAL EQUILIBRIUM MODEL, GROWTH POLICIES, GROWTH RATE, GROWTH RATES, HOUSEHOLD DATA, HOUSEHOLD SURVEY, HOUSEHOLD SURVEYS, IMPORTS, INCOME, INCOME COUNTRIES, INCOME DISTRIBUTION, INCOME GROWTH, INCOME LEVELS, INCOME MODULE, INCOME POVERTY, INFLATION, INFORMAL SECTOR, INFORMAL SECTORS, INSTITUTIONAL ARRANGEMENTS, INSTITUTIONAL CHANGES, INVESTMENT CLIMATE, JOB MARKET, LABOR FORCE, LABOR MARKET, LABOR MARKETS, LABOR SUPPLY, LOW-INCOME COUNTRIES, MACROECONOMIC FRAMEWORK, MACROECONOMIC OUTCOMES, MACROECONOMIC POLICY, MEAN INCOME, MEAN INCOME GROWTH, NATIONAL ACCOUNTS, OUTPUT GROWTH, PARTICIPATORY POVERTY, PARTICIPATORY POVERTY ASSESSMENTS, POLICY CHANGE, POLICY CHOICES, POLICY ISSUES, POLICY MEASURES, POLITICAL ECONOMY, POOR GROWTH STRATEGIES, POOR PEOPLE, POPULATION GROWTH, POVERTY ANALYSIS, POVERTY ASSESSMENT, POVERTY ASSESSMENTS, POVERTY HEADCOUNT, POVERTY IMPACT, POVERTY LEVELS, POVERTY LINE, POVERTY LINES, POVERTY MONITORING, POVERTY REDUCTION, POVERTY REDUCTION STRATEGY, PRICE LEVELS, PRIVATE SECTOR, PRIVATE SECTORS, PRO-POOR, PRO-POOR GROWTH, PRODUCTION FUNCTION, PRODUCTION TECHNOLOGY, PRODUCTIVITY, PUBLIC EXPENDITURE, PUBLIC INVESTMENT, PUBLIC SECTOR, PUBLIC SERVICES, QUANTITATIVE METHODS, RAPID GROWTH, REAL EXCHANGE RATE, REAL EXCHANGE RATES, REAL WAGE RATES, REAL WAGES, REFORM POLICIES, RELATIVE INCOME, RELATIVE INCOMES, RESOURCE ALLOCATION, RURAL AREAS, RURAL ECONOMY, SAVINGS, SECTOR EMPLOYMENT, SKILLED WORKERS, SOCIAL EXPENDITURES, SOCIAL INDICATORS, STRUCTURAL ADJUSTMENT, STRUCTURAL ADJUSTMENT PROGRAMS, STRUCTURAL POLICIES, STRUCTURAL REFORM, STRUCTURAL REFORMS, SUBSTITUTION EFFECT, TAX RATES, TAXATION, TAXES, TIME SERIES, TRADE POLICY, TRADE SHOCKS, TRADEOFFS, UNEMPLOYMENT, UNSKILLED LABOR, URBAN AREAS, VOLUNTARY UNEMPLOYMENT, WAGE INCOME, WAGE LEVEL, WAGE RATES