The objective of this paper is to obtain several poverty reduction effects by using multipliers based on social accounting matrices. Expressions relating them to Foster, Greer and Thorbecke poverty measures were derived, and two simulations were carried out for the Spanish region of Extremadura. In the first, we posited a per capita transfer equivalent to certain social policy instruments already existing in this region. Structural path analysis is also used to determine the paths by which poverty reduction effects are transmitted. In the second, we calculate the minimum government expenditure in transfers needed to reduce the regional poverty indices to the national values. The results confirmed that the main feature of poverty in Extremadura is incidence.

The aim of this paper is contributing to fill the gap between the macroeconomic effects of policy reforms and the microeconomic and social ones, considering simultaneously both kind of impacts. Regarding fiscal adjustments, concern about the sustainability of public deficit and debt resulting from the Great Recession led governments to adopt austerity measures in most European countries. Our analysis considers the redistributive effects of such adjustments for the Spanish economy by simulating a hypothetical reduction of public deficit and distinguishing between spending cuts and tax hikes. In terms of analytical approach, a Computable General Equilibrium (CGE) model and a microsimulation model are integrated to include the general equilibrium effects of these measures as well as the effects on income distribution. The results contribute to the growing but limited literature on the distributional effects of fiscal consolidations by showing that policymakers have to choose between more inequality or more poverty.