Publications by Jesse Lastunen — tax-benefit microsimulation, social policy, and AI in economics. https://policy.fi/research/ 2026-07-23T00:00:00Z Jesse Lastunenhttps://policy.fi https://link.springer.com/book/9783032314130 2026-06-08T00:00:00Z

A forthcoming chapter in the EUROMOD 30th-anniversary volume describing the development and use of tax-benefit microsimulation models in the Global South, drawing on the experience of SAMOD, the SOUTHMOD model family, and EUROMOD-based models for Latin America.

https://policy.fi/research/#pub-40 2026-06-08T00:00:00Z

A forthcoming WIDER working paper examining how to account for informal consumption when modelling value-added tax (VAT) in SOUTHMOD tax-benefit microsimulation models, with applications to Rwanda, Peru, Mozambique, and Uganda.

https://www.wider.unu.edu/publication/southmod-country-report-rwanda-rwamod-v20 2026-05-18T00:00:00Z

This report documents RWAMOD, the SOUTHMOD model developed for Rwanda. This work was carried out by UNU-WIDER, SASPRI, and the Rwanda Revenue Authority (RRA). The results presented in this report are derived using RWAMOD version 2.0, which is part of the SOUTHMOD bundle (SOUTHMOD_A4.0) and runs on EUROMOD software. The report describes the different tax-benefit policies in place, how the microsimulation model picks up these different provisions, and the database on which the model runs. It concludes with a validation of results against external data sources for Rwanda.

https://www.wider.unu.edu/publication/southmod-country-report-uganda-ugamod-v30 2026-05-18T00:00:00Z

This report documents UGAMOD, the SOUTHMOD model developed for Uganda. This work was carried out by Uganda Revenue Authority (URA) in collaboration with the project partners. The results presented in this report are derived using UGAMOD version 3.0, which is part of the SOUTHMOD bundle (SOUTHMOD_A4.0) and runs on EUROMOD software. The report describes the different tax-benefit policies in place, how the microsimulation model picks up these different provisions, and the database on which the model runs. It concludes with a validation of results against external data sources for Uganda.

https://doi.org/10.35188/UNU-WIDER/2026/713-8 2026-04-23T00:00:00Z

Ethiopia initiated a major electricity sector reform in 2024, significantly increasing tariffs and introducing a value-added tax on electricity consumption to improve the financial sustainability of its state-owned utility. This study assesses the short-term distributional, sectoral, and cost-of-living impacts of this reform. The analysis links a tax-benefit microsimulation model (ETMOD) with a price-based social accounting matrix (SAM) multiplier framework to capture both direct, household-level welfare changes and indirect, economy-wide price transmission effects. The results show the reform is regressive, increasing the national poverty rate by 3.5 percentage points in a static, short-run setting. The tariff increase is the primary driver of this effect, while the VAT has a smaller impact. Indirect effects, transmitted through higher prices for essential goods such as food and water, account for two-thirds of the total poverty impact and are larger than the direct effect of higher electricity bills. Rural and informal households are disproportionately affected. These findings demonstrate that without compensatory measures, electricity pricing reforms necessary for fiscal stability can impose substantial social costs. We conclude that pairing such reforms with targeted social protection is essential to shield vulnerable households from adverse outcomes.

https://doi.org/10.35188/UNU-WIDER/ATZV1858 2026-04-23T00:00:00Z

This study investigates the feasibility of generating synthetic input data for the Ghanaian tax-benefit microsimulation model (GHAMOD) to address limitations posed by infrequent survey data. Current GHAMOD input datasets are derived from the 2013 and 2017 Ghana Living Standards Surveys. Reliance on such dated household data reduces the accuracy of policy analysis, particularly when failing to account for broader demographic shifts and structural changes that occur between survey rounds. This research explores methodologies ranging from linear interpolation to advanced machine learning techniques, including imputation and predictive modelling, to create synthetic data for intervening years (2014–16) and future years (2018 onwards). By combining existing survey data with complementary external data sources, this study demonstrates that synthetic data generation is a feasible, transformative approach for enhancing the timeliness of fiscal policy analysis. The research establishes a framework for effectively leveraging high-frequency complementary data to bridge temporal gaps, thereby improving the model's predictive capabilities and relevance for analysing the budgetary and distributional impacts of fiscal policies. This report details findings on suitable data and methods, discusses challenges, offers selected case studies, and provides a roadmap for integrating these techniques into national data ecosystems, with potential applications for other tax-benefit microsimulation models in Africa, Asia, and Latin America.

https://doi.org/10.35188/UNU-WIDER/2026/748-0 2026-04-22T00:00:00Z

This paper examines the experience of building and using tax-benefit microsimulation models for countries in the Global South within the EUROMOD framework, drawing on SAMOD, the SOUTHMOD model family, and EUROMOD-based models for Latin America. It reviews the research contributions these tools have enabled — spanning distributional analysis, work incentives, informal employment, and automatic stabilization — and discusses the challenges of maintaining and updating them, as well as the opportunities they open for new avenues of research to strengthen social protection and fiscal capacity in developing economies.

https://vastapaino.fi/sivu/tuote/globaali-sosiaalipolitiikka/5353614 2026-01-01T00:00:00Z

This chapter provides the first Finnish-language overview of the types of economic and social policies that low- and middle-income countries implemented to mitigate the negative effects of economic shocks, how successful or effective these policies were, and how policy measures taken during crises affect post-crisis policies. The topic is assessed through both a social policy and an economic lens.

https://academic.oup.com/book/61513 2025-01-01T00:00:00Z

We examine the distributional effects of the COVID-19 pandemic and associated tax-benefit measures in seven Sub-Saharan African countries, focusing on the onset of the crisis. We evaluate impacts on disposable incomes, considering variations across income groups; assess the effectiveness of tax-benefit policies in mitigating income losses; and analyse the influence of these measures on income-based poverty and inequality. We find notable reductions in disposable incomes, concentrated among higher-income households, and moderate increases in headcount poverty rates and poverty gaps. The study highlights the low effectiveness of pre-existing tax-benefit policies, with coverage gaps for the informal sector and a lack of income-dependent means-tested benefits. Discretionary tax-benefit policies in Mozambique and Zambia cushioned the shock for low-income households to a small extent. Conversely, school closures in Ethiopia and Ghana suppressed the provision of school meals, adding strain to households with school-age children.

https://academic.oup.com/book/61513/chapter/536390620 2025-01-01T00:00:00Z

This paper investigates the impact of the COVID-19 pandemic and related tax-benefit measures in Viet Nam, relying on tax-benefit microsimulation modelling. The focus is on the initial phase of the crisis in 2020. The study delves into how the pandemic affected disposable incomes, examining the differences across the income distribution and impacts on measures of poverty and inequality. The paper also evaluates the effectiveness of tax-benefit policies in alleviating income losses. The findings suggest that disposable incomes decreased by nearly 2.25 per cent on average, with the most pronounced effect experienced by higher-income households. The estimates point to moderate increases in both the headcount poverty rate and the extent of poverty, as measured by the poverty gap. Automatic stabilizers had a limited effect in cushioning the income shock. The discretionary social protection measures adopted in response to the crisis, however, halved the pandemic-induced rise in the national poverty rate.

https://academic.oup.com/book/61513 2025-01-01T00:00:00Z

In the wake of the COVID-19 pandemic, several countries enacted tax and social protection measures to help mitigate the economic hardship faced by individuals and households. This experience underscores the need to better understand the impact of such programmes on incomes and poverty during crises, especially in low- and middle-income countries where they are most needed. This paper reviews existing empirical literature on the subject, conducting a scoping review on quantitative studies published between 2000 and 2022.

https://www.wider.unu.edu/publication/southmod-country-report-viet-nam-vnmod-v35 2025-01-01T00:00:00Z

This report documents VNMOD, the SOUTHMOD model developed for Viet Nam. This work has been carried out by the Central Institute for Economic Management (CIEM) in collaboration with UNU-WIDER and SASPRI. The results presented in this report are derived using VNMOD version 3.5, which is part of the SOUTHMOD bundle (SOUTHMOD_A3.0) and runs on EUROMOD software. The report describes the different tax-benefit policies in place, how the microsimulation model picks up these different provisions, and the database on which the model runs. It concludes with a validation of results against external data sources for Viet Nam.

https://doi.org/10.35188/UNU-WIDER/ISUF5565 2025-01-01T00:00:00Z

This technical note documents UGAMOD-TAX, a microsimulation model for personal taxation in Uganda, built using administrative tax records from the Uganda Revenue Authority (URA). It complements the standard survey-based UGAMOD model, developed under UNU-WIDER's SOUTHMOD project, by leveraging detailed PAYE, presumptive tax, and register data. This administrative foundation enables more accurate simulation of specific taxes and their distributional impacts, particularly capturing high-income earners often underrepresented in survey data. This note focuses on the first version of the model, which uses data and tax policy rules from the 2021/2022 financial year. The model enables policymakers to quantitatively evaluate the fiscal and distributional effects of potential tax reforms.

https://doi.org/10.35188/UNU-WIDER/2024/439-9 2024-01-01T00:00:00Z

This paper analyses the effectiveness of tax-benefit systems in reducing poverty and inequality across 13 countries in the Global South. Using national survey data and tax-benefit microsimulation models from the SOUTHMOD project, we provide a cross-country perspective on the redistributive impact of fiscal policies. Our analysis involves decomposing the sources of disposable income across the income distribution and estimating the contributions of different policy instruments to poverty and inequality. Additionally, we assess gender disparities in outcomes, quantify the distributional effects of recent policy changes, and simulate two budget-neutral tax-benefit reforms, focusing on their targeting efficiency and effects on work incentives. Studying the variability of these effects across countries illustrates how better policy design can improve welfare outcomes.

https://doi.org/10.1016/j.wdp.2023.100503 2023-01-01T00:00:00Z

We develop a new methodology to nowcast the effects of the COVID-19 crisis on GDP and forecast its evolution in small, export-oriented countries. To this aim, we exploit variation in financial indexes at the industry level in the early stages of the crisis and relate them to the expected duration of the crisis for each industry, under the assumption that the main shocks to financial prices in 2020 came from COVID-19. Starting from the latest official information available at different stages of the crisis on industry-level trend deviations of GDP, often a few months old, we predict the ensuing recovery trajectories using the most recent financial data available at the time of the prediction. The financial data reflect, among other things, how subsequent waves of infections and information about new vaccines have impacted expectations about the future. We apply our method to Vietnam, one of the most open economies in the world, and obtain predictions that are more optimistic than projections by the International Monetary Fund and other international forecasters, and closer to the realised figures. Our claim is that this better-than-expected performance was visible in stock market data early on but was largely missed by conventional forecasting methods.

https://doi.org/10.35188/UNU-WIDER/2023/438-0 2023-01-01T00:00:00Z

We examine the distributional effects of the COVID-19 pandemic and associated tax-benefit measures in seven sub-Saharan African countries, focusing on the onset of the crisis. We evaluate impacts on disposable incomes, considering variations across income groups; assess the effectiveness of tax-benefit policies in mitigating income losses; and analyse the influence of these measures on income-based poverty and inequality. We find notable reductions in disposable incomes, concentrated among higher-income households, and moderate increases in headcount poverty rates and poverty gaps. The study highlights the low effectiveness of pre-existing tax-benefit policies, with coverage gaps for the informal sector and a lack of income-dependent means-tested benefits. Discretionary tax-benefit policies in Mozambique and Zambia cushioned the shock for low-income households to a small extent. Conversely, school closures in Ethiopia and Ghana suppressed the provision of school meals, adding strain to households with school-age children.

https://doi.org/10.35188/UNU-WIDER/2023/428-1 2023-01-01T00:00:00Z

This paper investigates the impact of the COVID-19 pandemic and related tax-benefit measures in Viet Nam. The focus is on the initial phase of the crisis in 2020. The study delves into how the pandemic affected disposable incomes, examining the differences across the income distribution and impacts on measures of poverty and inequality. The paper also evaluates the effectiveness of tax-benefit policies in reducing income losses caused by the pandemic, covering both the automatic stabilization of the pre-existing tax-benefit system and discretionary policy measures adopted in response to the crisis. The findings suggest that disposable incomes decreased by nearly 2.25 per cent on average, with the most pronounced effect experienced by higher-income households. Additionally, the estimates point to moderate increases in both the headcount poverty rate and the extent of poverty, as measured by the poverty gap. Automatic stabilizers had a limited effect in cushioning the income shock. The discretionary social protection measures, however, halved the pandemic-induced rise in the national poverty rate and fully reversed income losses for the poorest income quartile.

https://doi.org/10.35188/UNU-WIDER/2023/314-7 2023-01-01T00:00:00Z

In the wake of the COVID-19 pandemic, several countries enacted tax and social protection measures to help mitigate the economic hardship faced by individuals and households. This experience underscores the need to better understand the impact of such programmes on incomes and poverty during crises, especially in low- and middle-income countries (LMICs) where they are most needed. This paper reviews existing empirical literature on the subject, conducting a scoping review on quantitative studies published between 2000 and 2022. Following a structured selection approach, we identify 38 studies about the role of social protection and taxation in LMICs during periods of crisis. The results reveal that LMICs often enact both vertical and horizontal expansions of existing unconditional cash transfer schemes during crises, although the applications vary by geography. Our research also suggests a sharp increase in recent studies because of the COVID-19 pandemic, and a large variety of methods used to study the subject. In terms of effects, social protection can help cushion households against crises, but the effect size depends on the policy adopted, country context, and type of crisis. The minimal empirical evidence about tax policy studies do not enable us to draw conclusions.

https://doi.org/10.35188/UNU-WIDER/2023/381-9 2023-01-01T00:00:00Z

Establishing an equitable and efficient tax system is essential for reducing poverty, combating inequality, and fostering sustainable economic growth. Rwanda's government has recognized this and implemented significant changes to the personal income tax schedule for 2023 and 2024 as part of broader tax reforms set forth in its Medium-Term Revenue Strategy. This study examines the fiscal and distributional effects of the personal income tax changes, employing a newly-created tax-benefit microsimulation model for Rwanda. Specifically, we compare the reform to a business-as-usual scenario with the previous income tax regime. The analysis shows that the reform enhances the disposable income of many workers, albeit at the expense of reduced government revenue. At the population level, the reform predominantly benefits the highest income deciles, who constitute the majority of income taxpayers in Rwanda. The lowest deciles, for the most part, remain unaffected by the changes.

https://doi.org/10.35188/UNU-WIDER/WTN/2023-2 2023-01-01T00:00:00Z

SOUTHMOD tax-benefit microsimulation models may in some cases oversimulate taxes or benefits, generating greater expenditure, a greater number of beneficiaries, or greater amounts of taxes or taxpayers than reported in administrative data. Drawing on an example of a social benefit policy in Rwanda, implemented in the RWAMOD model, this technical note shows why such issues can be important in the analysis of tax-benefit policy reforms. The note also shows how oversimulation can be addressed in SOUTHMOD models by downward adjustment of relevant taxes and benefits.