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MicroZAMOD – simulating tax and benefit policies for development in Zambia
The MicroZAMOD is freely accessible for non-commercial research use. You may request access to the model here.
MicroZAMOD, the tax-benefit microsimulation model for Zambia, 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 MicroZAMOD, users can simulate reforms of the Zambian 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. MicroZAMOD also allows users to implement hypothetical income tax and social security reforms and calculate their effects on inequality and the government budget. Existing policies or past policy reforms can be evaluated as well.
MicroZAMOD can answer for example following questions:
- How can the existing Social Cash Transfer benefit be amended to increase coverage?
- How much would such a policy reform cost?
- How tax rates could be increased to offset (either partially or wholly) the additional expenditures on social protection?
Possible policy reform simulations in MicroZAMOD include for example:
- changing the social cash transfer scheme from a household benefit to an individual benefit
- introducing a new universal child benefit
- introducing a new universal pension payment to the elderly
- introducing a new youth unemployment benefit.
MicroZAMOD has been developed in cooperation with the Zambia Institute for Policy Analysis and Research (ZIPAR), and Southern African Social Policy Research Insights (SASPRI). The latest available version of MicroZAMOD is based on the Living Conditions Monitoring Survey (LCMS) 2010 and 2015, allowing for representative results on the national and sub-national level. Policies are simulated for the years 2010 and 2015-22. The International Labour Organization (ILO) has collaborated with the MicroZAMOD initiative and supported the training events during 2017-19.
MicroZAMOD was launched for use in 2017. The first training course, organized in collaboration with ILO, took place in 2017 in Lusaka, Zambia with participants from the Zambian government, civil society organizations and academia. Further training courses followed the first event in 2018 and 2019. In 2022, the regular training was replaced with a so-called research retreat, intended to empower participants to use the model to answer specific policy questions and develop policy notes based on model simulations.
Resources
User manual v1.4
Country report v2.12
Exercises
Video training
This training course explains how to set up and use the tax-benefit microsimulation model for Zambia, MicroZAMOD. It aims at giving the users of SOUTHMOD models an introduction to microsimulation in general and the MicroZAMOD model v1.4 in particular
MicroZAMOD 1 | a short introduction
In this video, we describe the MicroZAMOD model and introduce the SOUTHMOD research project. This is the first video in a series of five videos that together form a training course on how to set up and use the tax-benefit microsimulation model for Zambia, MicroZAMOD.
We start by briefly explaining what microsimulation is and what it can be used for. The session also explains the data and policies that are included in the current version of the MicroZAMOD model v1.4, for what purpose the model can be used, and how it works. Finally, we look at the MicroZAMOD user interface and give an overview of what is covered in the rest of the training course.
MicroZAMOD 2 | getting started
In this video, we explore MicroZAMOD in more detail and depth. This is the second video in a series of five videos that together form a training course on how to set up and use the tax-benefit microsimulation model for Zambia, MicroZAMOD v1.4
Here we introduce the policies included in the model, especially the definitional and tax policies, and go through how to navigate the interface. We define the spine, and explain why the order in which the policies are listed in the model is important. The video also introduces constants, income lists, and tax units and policies. We briefly touch upon benefit policies as well, although these will be covered more thoroughly in the third video of the training course. We conclude the video by going through the naming conventions of EUROMOD and MicroZAMOD.
MicroZAMOD 3 | tax and benefit policies
In this video, we will look at how tax-benefit policies are constructed. This is the third video in a series of five videos that together form a training course on how to set up and use the tax-benefit microsimulation model for Zambia, MicroZAMOD v1.4.
Here we define systems, policies, functions, and parameters and explain how they relate to each other. The policy functions Elig, ArithOP, BenCalc, and SchedCalc are covered in detail. At the end of the video we give step-by-step instructions on how to run the model and access the output.
MicroZAMOD 4 | policy changes
In this video, we will build on what was covered in the previous video. This is the fourth video in a series of five videos that together form a training course on how to set up and use the tax-benefit microsimulation model for Zambia, MicroZAMOD v1.4.
We will explain how to add a new system to MicroZAMOD, how to change an existing policy in the model, and how to add a new policy. We will also show how to do all of these in the MicroZAMOD interface.
MicroZAMOD 5 | walking through the model
In this video, we will walk you through the whole MicroZAMOD model and look at the policies in detail. This is the last video in a series of five videos that together form a training course on how to set up and use the tax-benefit microsimulation model for Zambia, MicroZAMOD v1.4.
The video starts with reviewing the user interface, focusing on the tabs: the country and administration tools, and the applications. We will briefly go over the variables tool. We then move on to cover the policies in the model from definitional policies, income policies, and tax policies to social benefit policies. Finally, we show where to access the output file and statistics presenter.