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Quantifying the impacts of expanding social protection on efficiency and equity: Evidence from a behavioural microsimulation model for Ghana

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  • Robert Darko Osei
  • Jukka Pirttilä
  • Pia Rattenhuber

Abstract

A large informal sector is a challenge for developing countries building up social protection systems. Expanding social safety nets reduces poverty, but financing them can increase the tax burden, potentially reducing availability of formal sector jobs. This paper quantifies impacts on income distribution and efficiency of expanding developing countries' social protection. Results from a new tax-benefit microsimulation model for Ghana are combined with the extensive margin elasticity of the share of formal work with respect to the tax wedge on formal labour.

Suggested Citation

  • Robert Darko Osei & Jukka Pirttilä & Pia Rattenhuber, 2017. "Quantifying the impacts of expanding social protection on efficiency and equity: Evidence from a behavioural microsimulation model for Ghana," WIDER Working Paper Series wp-2017-193, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2017-193
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    References listed on IDEAS

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    7. Garganta, Santiago & Gasparini, Leonardo, 2015. "The impact of a social program on labor informality: The case of AUH in Argentina," Journal of Development Economics, Elsevier, vol. 115(C), pages 99-110.
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    Cited by:

    1. Palviainen, Heikki, 2019. "Changing Nordic model? A policy analysis," EUROMOD Working Papers EM15/19, EUROMOD at the Institute for Social and Economic Research.

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    More about this item

    Keywords

    Developing countries; Social protection; Taxation; Microsimulation;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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