LABORsim: an Agent-Based Microsimulation of Labour Supply. An Application to Italy
AbstractMost Oecd Countries are experiencing a rapid population ageing. Italy adds to this picture a very low labour market participation of the elders, so that most projections of the impact of ageing on the labour market are rather pessimistic. However, there are other long run modifications currently underway that will presumably have a sizeable impact on the labour market, above all changes in the retirement legislation, in educational choices and participation behaviour. In this paper we present LABORsim, an agent based microsimulation model of labour supply, which offers new insights on the likely evolution of the labour force in the next decades in Italy. LABORsim integrates the current demographic projections with simulation modules modelling retirement rules, retirement behaviours, migrations, education and participation choices, plus a consolle to implement various policy scenario analyses. When all these factors are taken into account, projections for next decades are not that pessimistic. In most scenarios, the overall participation rate is expected to increase steadily for the next two decades, while shortages in the labour force supply and an unfavourable dynamics for the economic dependency rate are expected to show up only after 2020, when the baby boom generations will arrive at their retirement ages. This is not enough, however, to allow Italy to meet the EU Stockolm and Lisbon targets for male and female employment rates for many decades to come. The sharp increase in the participation rates for the elderly (aged 55-64), mainly driven by the recent changes in the retirement eligibility criteria, will make it possible to meet the Stockholm target of 50% employment rate in this age group by 2015, i.e. with only 5 years of delay.
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Bibliographic InfoPaper provided by LABORatorio R. Revelli, Centre for Employment Studies in its series LABORatorio R. Revelli Working Papers Series with number 46.
Length: 24 pages
Date of creation: 2006
Date of revision:
microsimulation; participation; employment; retirement; education; policy evaluation.;
Other versions of this item:
- Roberto Leombruni & Matteo Richiardi, 2006. "LABORsim: An Agent-Based Microsimulation of Labour Supply – An Application to Italy," Computational Economics, Society for Computational Economics, vol. 27(1), pages 63-88, February.
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
- I2 - Health, Education, and Welfare - - Education
- J1 - Labor and Demographic Economics - - Demographic Economics
- J2 - Labor and Demographic Economics - - Demand and Supply of Labor
- J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
- N4 - Economic History - - Government, War, Law, International Relations, and Regulation
- O52 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Europe
- C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
This paper has been announced in the following NEP Reports:
- NEP-AGE-2007-04-28 (Economics of Ageing)
- NEP-ALL-2007-04-28 (All new papers)
- NEP-CMP-2007-04-28 (Computational Economics)
- NEP-MAC-2007-04-28 (Macroeconomics)
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