IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2010.13471.html
   My bibliography  Save this paper

Deep reinforced learning enables solving rich discrete-choice life cycle models to analyze social security reforms

Author

Listed:
  • Antti J. Tanskanen

Abstract

Discrete-choice life cycle models of labor supply can be used to estimate how social security reforms influence employment rate. In a life cycle model, optimal employment choices during the life course of an individual must be solved. Mostly, life cycle models have been solved with dynamic programming, which is not feasible when the state space is large, as often is the case in a realistic life cycle model. Solving a complex life cycle model requires the use of approximate methods, such as reinforced learning algorithms. We compare how well a deep reinforced learning algorithm ACKTR and dynamic programming solve a relatively simple life cycle model. To analyze results, we use a selection of statistics and also compare the resulting optimal employment choices at various states. The statistics demonstrate that ACKTR yields almost as good results as dynamic programming. Qualitatively, dynamic programming yields more spiked aggregate employment profiles than ACKTR. The results obtained with ACKTR provide a good, yet not perfect, approximation to the results of dynamic programming. In addition to the baseline case, we analyze two social security reforms: (1) an increase of retirement age, and (2) universal basic income. Our results suggest that reinforced learning algorithms can be of significant value in developing social security reforms.

Suggested Citation

  • Antti J. Tanskanen, 2020. "Deep reinforced learning enables solving rich discrete-choice life cycle models to analyze social security reforms," Papers 2010.13471, arXiv.org, revised Feb 2022.
  • Handle: RePEc:arx:papers:2010.13471
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2010.13471
    File Function: Latest version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. John P. Rust, 1989. "A Dynamic Programming Model of Retirement Behavior," NBER Chapters, in: The Economics of Aging, pages 359-404, National Bureau of Economic Research, Inc.
    2. Volodymyr Mnih & Koray Kavukcuoglu & David Silver & Andrei A. Rusu & Joel Veness & Marc G. Bellemare & Alex Graves & Martin Riedmiller & Andreas K. Fidjeland & Georg Ostrovski & Stig Petersen & Charle, 2015. "Human-level control through deep reinforcement learning," Nature, Nature, vol. 518(7540), pages 529-533, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tulika Saha & Sriparna Saha & Pushpak Bhattacharyya, 2020. "Towards sentiment aided dialogue policy learning for multi-intent conversations using hierarchical reinforcement learning," PLOS ONE, Public Library of Science, vol. 15(7), pages 1-28, July.
    2. Mahmoud Mahfouz & Angelos Filos & Cyrine Chtourou & Joshua Lockhart & Samuel Assefa & Manuela Veloso & Danilo Mandic & Tucker Balch, 2019. "On the Importance of Opponent Modeling in Auction Markets," Papers 1911.12816, arXiv.org.
    3. Shimizutani, Satoshi, 2011. "A new anatomy of the retirement process in Japan," Japan and the World Economy, Elsevier, vol. 23(3), pages 141-152.
    4. Imen Azzouz & Wiem Fekih Hassen, 2023. "Optimization of Electric Vehicles Charging Scheduling Based on Deep Reinforcement Learning: A Decentralized Approach," Energies, MDPI, vol. 16(24), pages 1-18, December.
    5. Jacob W. Crandall & Mayada Oudah & Tennom & Fatimah Ishowo-Oloko & Sherief Abdallah & Jean-François Bonnefon & Manuel Cebrian & Azim Shariff & Michael A. Goodrich & Iyad Rahwan, 2018. "Cooperating with machines," Nature Communications, Nature, vol. 9(1), pages 1-12, December.
      • Abdallah, Sherief & Bonnefon, Jean-François & Cebrian, Manuel & Crandall, Jacob W. & Ishowo-Oloko, Fatimah & Oudah, Mayada & Rahwan, Iyad & Shariff, Azim & Tennom,, 2017. "Cooperating with Machines," TSE Working Papers 17-806, Toulouse School of Economics (TSE).
      • Abdallah, Sherief & Bonnefon, Jean-François & Cebrian, Manuel & Crandall, Jacob W. & Ishowo-Oloko, Fatimah & Oudah, Mayada & Rahwan, Iyad & Shariff, Azim & Tennom,, 2017. "Cooperating with Machines," IAST Working Papers 17-68, Institute for Advanced Study in Toulouse (IAST).
      • Jacob Crandall & Mayada Oudah & Fatimah Ishowo-Oloko Tennom & Fatimah Ishowo-Oloko & Sherief Abdallah & Jean-François Bonnefon & Manuel Cebrian & Azim Shariff & Michael Goodrich & Iyad Rahwan, 2018. "Cooperating with machines," Post-Print hal-01897802, HAL.
    6. Sun, Alexander Y., 2020. "Optimal carbon storage reservoir management through deep reinforcement learning," Applied Energy, Elsevier, vol. 278(C).
    7. Yassine Chemingui & Adel Gastli & Omar Ellabban, 2020. "Reinforcement Learning-Based School Energy Management System," Energies, MDPI, vol. 13(23), pages 1-21, December.
    8. Mira Frick & Ryota Iijima & Tomasz Strzalecki, 2019. "Dynamic Random Utility," Econometrica, Econometric Society, vol. 87(6), pages 1941-2002, November.
    9. Haan, Peter & Tolan, Songül, 2019. "Labor supply and fiscal effects of partial retirement – The role of entry age and the timing of pension benefits," The Journal of the Economics of Ageing, Elsevier, vol. 14(C).
    10. Woo Jae Byun & Bumkyu Choi & Seongmin Kim & Joohyun Jo, 2023. "Practical Application of Deep Reinforcement Learning to Optimal Trade Execution," FinTech, MDPI, vol. 2(3), pages 1-16, June.
    11. Lu, Yu & Xiang, Yue & Huang, Yuan & Yu, Bin & Weng, Liguo & Liu, Junyong, 2023. "Deep reinforcement learning based optimal scheduling of active distribution system considering distributed generation, energy storage and flexible load," Energy, Elsevier, vol. 271(C).
    12. Yuhong Wang & Lei Chen & Hong Zhou & Xu Zhou & Zongsheng Zheng & Qi Zeng & Li Jiang & Liang Lu, 2021. "Flexible Transmission Network Expansion Planning Based on DQN Algorithm," Energies, MDPI, vol. 14(7), pages 1-21, April.
    13. Huang, Ruchen & He, Hongwen & Gao, Miaojue, 2023. "Training-efficient and cost-optimal energy management for fuel cell hybrid electric bus based on a novel distributed deep reinforcement learning framework," Applied Energy, Elsevier, vol. 346(C).
    14. Michelle M. LaMar, 2018. "Markov Decision Process Measurement Model," Psychometrika, Springer;The Psychometric Society, vol. 83(1), pages 67-88, March.
    15. Stock, James H & Wise, David A, 1990. "Pensions, the Option Value of Work, and Retirement," Econometrica, Econometric Society, vol. 58(5), pages 1151-1180, September.
    16. Zichen Lu & Ying Yan, 2024. "Temperature Control of Fuel Cell Based on PEI-DDPG," Energies, MDPI, vol. 17(7), pages 1-19, April.
    17. Yang, Ting & Zhao, Liyuan & Li, Wei & Zomaya, Albert Y., 2021. "Dynamic energy dispatch strategy for integrated energy system based on improved deep reinforcement learning," Energy, Elsevier, vol. 235(C).
    18. Wang, Xuan & Shu, Gequn & Tian, Hua & Wang, Rui & Cai, Jinwen, 2020. "Operation performance comparison of CCHP systems with cascade waste heat recovery systems by simulation and operation optimisation," Energy, Elsevier, vol. 206(C).
    19. Wang, Yi & Qiu, Dawei & Sun, Mingyang & Strbac, Goran & Gao, Zhiwei, 2023. "Secure energy management of multi-energy microgrid: A physical-informed safe reinforcement learning approach," Applied Energy, Elsevier, vol. 335(C).
    20. Parvez Farazi, Nahid & Zou, Bo & Tulabandhula, Theja, 2022. "Dynamic On-Demand Crowdshipping Using Constrained and Heuristics-Embedded Double Dueling Deep Q-Network," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 166(C).

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:2010.13471. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.