This paper, authored by Alemayehu Geda, John Weeks and Herryman Moono, reviews an econometric model (ZAMMOD) currently being used by the Zambia Ministry of Finance for forecasting, policy analysis and budget preparation; identifies some limitations to the labour market block of ZAMMOD, and makes specific recommendations on how the block could be enhanced. The authors then introduce these recommendation into the model and run simulations examining the labour market impacts of the of austerity measures.