 Microsimulation approaches to studying shocks and social protection in selected developing economiesKwabena Adu-Ababio Economic Analysis and Policy, 2024, vol. 84, issue C, 1552-1576 Abstract: In this paper, I calculate automatic stabilization in Ghana, South Africa, and Ecuador to explain how they cushion income amid income and demand shocks. Additionally, I stress-test fiscal policies within these countries to gauge welfare alternatives and insurance. Adopting a discretionary action approach for Ghana, I introduce additional safety nets that improve welfare since the existing system fails shock resistance tests. The use of a microsimulation framework is justified as it can isolate the exact redistributive impact of tax-benefit policies and reforms from a changing environment where such policies operate. Income stabilization ranges from 1% to 22%, while demand stabilization ranges from 4% to 25% across the three countries. I formalize a new concept of poverty stabilization that ranges from nil to 46% to measure vulnerability. Through the study’s results, I reveal that the extent of income insurance needs to be improved in lower- and middle-income countries. Keywords: Developing countries; Shocks; Social protection; Fiscal policy; Microsimulation (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:84:y:2024:i:c:p:1552-1576 DOI: 10.1016/j.eap.2024.10.007 Access Statistics for this article Economic Analysis and Policy is currently edited by Clevo Wilson More articles in Economic Analysis and Policy from Elsevier |
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