Chapter

Peering into the Future

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/9780226300368.003.0004
Peering into the Future

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This chapter describes forward motion of Demographic and Economic Micro Simulation (DEMSIM) beyond 2006—the “projected simulation.” If the demographic and economic forces that drive the historical simulation through 2006 capture reasonably accurately the historical evolution of the U.S. population and economy for all key variables, carrying those forces forward should capture the future evolution of those variables and provide a foundation for analyzing the financial outlook for a program such as Social Security—whose finances are closely influenced by the characteristics of the population that it serves. The future evolution of demographic and economic attributes of the simulated population carries forward the momentum of forces built into the current population structure. It is modified slightly each year by the demographic attributes assigned to immigrants. Thus, historical trends in mortality, fertility, education acquisition, labor force participation and earnings, and marital rates and patterns, along with assumed rates of labor productivity growth, determine the future population's characteristics.

Keywords: projected simulation; Social Security; financial outlook; economic forces; demographic

Chapter.  2774 words.  Illustrated.

Subjects: Public Economics

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