Carl Emmerson () (Institute for Fiscal Studies) Howard Reed (Institute for Fiscal Studies) Andrew Shephard () (Institute for Fiscal Studies and University College London)
Abstract
The 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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Publisher Info
Paper 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: Handle: RePEc:ifs:ifsewp:04/21
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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:
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Gary S. Becker & Nigel Tomes, 1994.
"X. Human Capital and the Rise and Fall of Families,"
NBER Chapters,
in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education (3rd Edition), pages 257-298
National Bureau of Economic Research, Inc.
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