An assessment of PenSim2
AbstractThe Department for Work and Pensions (DWP)’s Pensim2 model is a dynamic microsimulation model. The principal purpose of this model is to estimate the future distribution of pensioner incomes, thus enabling analysis of the distributional effects of proposed changes to pension policy. This paper presents the results of an assessment of Pensim2 by researchers at the IFS. We start by looking at the overall structure of the model, and how it compares with other dynamic policy analysis models across the world. We make recommendations at this stage as to how the overall modelling strategy could be improved. We then go on to analyse the characteristics of most of the individual modules which make up Pensim2, examining the data used and the regression and predictions used in each step. The results from this examination are used to formulate a set of short and medium-term recommendations for developing and improving the model. Finally, we look at what might become possible for the model over a much longer time frame – looking towards developing a ‘Pensim3’ model over the next decade or so.
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Bibliographic InfoPaper provided by Institute for Fiscal Studies in its series IFS Working Papers with number W04/21.
Length: 51 pp.
Date of creation: Dec 2004
Date of revision:
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Postal: The Institute for Fiscal Studies 7 Ridgmount Street LONDON WC1E 7AE
Find related papers by JEL classification:
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-03-13 (All new papers)
- NEP-CMP-2005-03-13 (Computational Economics)
- NEP-PBE-2005-03-13 (Public Economics)
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