Chapter

Simulating U.S. Demographics and Economics

Jagadeesh Gokhale

in Social Security

Published by University of Chicago Press

Published in print April 2010 | ISBN: 9780226300337
Published online February 2013 | e-ISBN: 9780226300368 | DOI: http://dx.doi.org/10.7208/chicago/9780226300368.003.0002
Simulating U.S. Demographics and Economics

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Analyzing Social Security's finances and the impact of reforms requires a model of both the program itself and of the population that it will affect. Most studies of Social Security use highly stylized mathematical models of the economy and highly stylized Social Security rules. This chapter describes the development of its initial population of individuals and families as of the year 1970. It describes how the simulation controls the construction of the initial population in detail to match the U.S. population structure during the late 1960s and early 1970s. The controls and matching procedures are based on information from microdata surveys that are statistically closely representative of the U.S. population—mainly the Current Population Survey (CPS; Census Bureau and Bureau of Labor Statitistics, various years). The construction is validated against the entire sample of the CPS to convince the reader that this part of the simulation “works.” The demographic features that are simulated include several attributes of the U.S. population as they evolve through time.

Keywords: Social Security; demographic features; economy; finances; U.S. population

Chapter.  3446 words.  Illustrated.

Subjects: Public Economics

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