MACRO SIMULATION MODELS
PILLAR 2 – LET’S WORK
WASHINGTON, D.C.
Camilo Mondragon-Velez
April 18, 2016
DEFINITIONS
 For the Let’s Work initiative, macro simulation models are intended as a tool for ex-ante
jobs estimation, that explore a range of outputs throughout the economy, resulting from
investments in a given sector(s)
 Macro Simulation Models includes methodologies of varied levels of complexity:
o
Macro-econometric models
Regression-based estimations of elasticities and multipliers across macro indicators time series.
o
Input-Output and SAM models
Static estimation of multipliers based on fixed transactional relationships across sectors of the economy at a
point in time, usually focused on the impact of interventions from a single sector.
o
Structural macroeconomic models
Comprehensive representation of the economy’s structure, agents (households, industry sectors, government
and the external sector) and markets (goods and services, labor, capital), which includes pricing adjustments in
estimates of impact. Includes computable general equilibrium (CGE) and dynamic structural models.
o
Other macro-economic approaches
Include combined approaches of the above with other methodologies, like Value Chains and Tracer Studies
MACRO SIMULATION MODELS GOALS RELATED TO JOBS
 Estimate jobs impact of investments coming from investments or growth in one or
multiple sectors, throughout the economy (including direct, indirect through the
supply chain and induced job creation).
 Estimate impact on different types of jobs: skills, education level, location.
 Understand impact on jobs under different macroeconomic environments and
conditions.
 Estimate impact on jobs under technological change and external shocks.
 Estimate impact on jobs of a variety of economic policies and changes in regulation.
 Dynamic models can provide estimates of job impacts over time.
MACRO PROJECTS UNDER LET’S WORK PILLAR 2
Partner
Methodology
Sector
Country
IFC
Input-Output / SAM plus sector-specific linked module
Airports
Jamaica
and D.R.
IFC
Input-Output / SAM plus sector-specific linked module
Ports
Multi-country
IFC
Improved Input-Output / SAM model for Philippines
Power
Turkey
IFC
Input-Output / SAM and Value Chains
Oil & Gas
Ghana
ILO
SAM-based Employment Projection Model
“Green
Industries”
Zambia
PIDG
TBD; considering leveraging ILO’s model.
Power
Zambia
WB
CGE and Social Cost-Benefit Analysis tool
Multi-Sector
West Bank
and Gaza
IFC
General Equilibrium and System Dynamics
Multi-Sector
Ethiopia
* PIDG Irrigation in Zambia and IFC Retail in Romania & Sri Lanka, initially proposed as macro studies, were transferred to Tracer Studies.
UPDATE ON MACRO PROJECTS UNDER LET’S WORK PILLAR 2
Technical
Feasibility
(MMWG) *
Concept
Note
(LW)
IFC Airports


IFC Ports

IFC Power

Project
IFC Oil & Gas

ILO Zambia

PIDG Power
Zambia
MMWG advised
discussion with ILO
WB West Bank
and Gaza

IFC Ethiopia

Current Status /
Implementation
Expected
Delivery
Estimated
Cost (USD)
• Consultant selected
• Inception report being revised
Jul / 2016
$ 180 K

• Consultant selected
• Inception report under review
Jul / 2016
$150 K

• Consultant and reviewers selected
• Expecting Inception report
Jul / 2016
$ 150 K

• Assessing data availability from
client for VC analysis and
availability of additional funding
Aug / 2016
$ 125 K
• ILO supporting Zambia to build
updated I/O
Dec / 2016
$ 100 K
• CGE consultant selection and CBA
tool design under way
Nov / 2016
$ 200 K
• Initial data collection and empirical
analysis under way
Nov / 2016
$140 K
• PIDG to re-submit proposal based
on dialogue with ILO.

MACRO MODELS WORKING GROUP MEMBERS
•
Marek Harsdorff, ILO
•
Massimiliano La Marca, ILO
•
Alex MacGillivray, CDC
•
Camilo Mondragon–Velez, IFC
•
Ann Muir, PIDG
•
Emelly Mutambatsere, AfDB
•
Martyn Shannon, DFID
•
Evgenia Shumilkina, IFC
•
Christopher Weiss, EIB