Improving Information for Social Policy Decisions -- The Uses of Microsimulation Modeling: Volume II, Technical Papers (1991)
Chapter: SIMULATION OF LONGITUDINAL HISTORIES
1979 CPS. PRISM also uses a database of pension plan provisions that was created by ICF. The model selects one of those pension plans for individuals who obtain a new job during the simulation.
CONTROL TOTALS
Both models use control totals in order to keep the annual aggregate levels of the major simulated variables in line with accepted projections of these variables over time. (These aggregates include birth rates, death rates, marriage rates, labor force participation, employment, and similar variables.) The individual simulation modules govern the distribution of events across demographic groups. After the simulation is run, the aggregate result is compared with the control total for that year, and if they differ, the results are proportionally adjusted in order to preserve the distribution across demographic groups while still yielding an aggregate that agrees with the control total.
Control totals for the two models are taken from similar sources. PRISM uses the alternative II-B assumptions from the report of the trustees of the Old Age, Survivors, and Disability Insurance (OASDI) Trust Funds to control projections of demographic events, the average wage, unemployment, interest rates, inflation rates, and wage growth. The model uses Bureau of Labor Statistics’ projections to control for employment levels and the proportion of the labor force in each industry over time. DYNASIM2 uses the most recent assumptions from the OASDI trustees’ report to control demographic events and economic variables (generally, the most recent II-B assumptions) and Bureau of Labor Statistics’ projections to control employment variables. Control totals in both models are updated with changes in the external economic and demographic projections. Moreover, the models can accommodate alternative assumptions, chosen by the analyst, about the time path of these control totals.
SIMULATION OF LONGITUDINAL HISTORIES
A dynamic simulation model uses information contained in the cross-sectional database as a starting point for the simulation of longitudinal histories of demographic and labor force events for individuals. The longitudinal histories in DYNASIM2 and PRISM are created by a set of modules that simulate each event in the following sequence: death, birth, marriage, divorce, labor force participation, through unemployment. Starting with the first year, the modules run in turn for each individual. The first individual goes through each module for the first year (death, birth, etc.), then the next individual goes through each module, and so on, until all individuals have gone through the demographic and labor force events modules for the first year. Then year 2 is simulated, starting with the first individual, from death through unemployment, and ending with the last individual.
TABLE 1 Basic Features of DYNASIM2 and PRISM
|
Feature |
DYNASIM2 |
PRISM |
|
Input Data |
Exact match of March 1973 CPS and social security earnings records |
Exact match of March 1978 CPS and social security earnings records; also matched with March and May 1979 CPS |
|
|
|
Lewin/ICF retirement plan provisions database |
|
Simulation base year |
1972 |
1977 |
|
Information in simulation database |
|
|
|
Demographic |
1973 |
1978–1979 |
|
Income |
1972 |
1977–1978 |
|
Employment |
1972–1973 |
1977–1979 |
|
Quarters of social security coverage |
1937–1972 |
1937–1977 |
|
Social security taxable earnings |
1951–1972 |
1951–1977 |
|
Pension characteristics |
|
1979 |
|
Events simulated to create longitudinal histories |
|
|
|
Demographic |
Death Birth Marriage Divorce Disability Leaving home Education level Migration |
Death Birth Marriage Divorce Disability |
|
Labor force |
Participation Annual hours of participation Hourly wage Whether unemployed Proportion of labor force hours unemployed |
Annual hours of work Hourly wage |
|
Job and pension characteristics |
|
Job change Industry Pension coverage Pension plan assignment |
|
Retirement and benefit acceptance |
|
Pension acceptance Social security acceptance |
