PERUMOD – simulating tax and benefit policies for development in Peru
The PERUMOD 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.
PERUMOD, the tax-benefit microsimulation model for Peru, 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 PERUMOD, users can simulate reforms of the Peruvian 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. PERUMOD 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.
PERUMOD can answer, for example, the following questions:
- Do the prospective recipients of a new cash transfer work in the formal or informal sector?
- How could tax rates be increased to offset the additional expenditures on social protection?
- How would an increase in income tax rates influence poverty and inequality?
Possible policy reform simulations in PERUMOD include for example:
- a universal pension payment to the elderly
- a youth unemployment benefit
However, the model allows the simulation of a multitude of other policy reforms as well. In addition to different taxes and social insurance contributions, PERUMOD includes a conditional cash transfer programme for households with children (Juntos) and a subsidized state pension programme for the elderly (Pension 65).
PERUMOD has been developed by Universidad del Pacifico and updated 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 PERUMOD is based on the National Household Income Survey (Encuesta Nacional de Hogares, ENAHO) 2019 and 2020, provided freely by the National Institute of Statistics e Informatics of Peru and allowing for representative results at the national level. Policies are simulated for the years 2019–2022.