As developing country governments increase their expenditure, additional revenues need to be raised in an efficient and equitable way. In order to help with this task, EDePo has a growing research programme on tax and social security system issues, largely focusing on middle income countries.

To date, our research in this area has concentrated on describing and analysing actual, proposed and counterfactual changes to tax and social security systems, making use of existing large household and individual level surveys. In particular, we model the impact of reforms on incomes, welfare and behaviour in developing countries in order to better understand the distributional and efficiency effects of various reforms.

Examples of the reserach questions we consider include: how do changes to the Chilean pension system affect individuals' labour supply, including the choice of working in the formal or informal labour market?; what are the distributional effects of changes to direct and indirect taxes in Mexico and El Salvador?; how large are potential consumer welfare gains from removing VAT exemptions and reduced rates in Mexico?; what are the challenges for tax reform in Turkey?