The Mini-Integrated Macroeconomic Model for Poverty Analysis : A Framework for Analyzing the Unemployment and Poverty Effects of Fiscal and Labor Market Reforms

Agenor describes a specialized and less data-intensive version of the Integrated Macroeconomic Model for Poverty Analysis (IMMPA) developed by Agenor, Izquierdo, and Fofack (2003) and Agenor, Fernandes, Haddad, and van der Mensbrugghe (2002). The mini-IMMPA focuses only on the real side but it offers a more detailed treatment of the labor market (by accounting, for instance, for public education, employment subsidies, and job security provisions) and the tax structure. Simulations of a cut in payroll taxes on unskilled labor show the importance of accounting for the fiscal implications of labor market reforms when assessing their effects on unemployment and poverty.This paper - a product of the Poverty Reduction and Economic Management Division, World Bank Institute - is part of a larger effort in the institute to analyze the interactions between micro and macro factors in the design of poverty reduction strategies