Dynamic Microsimulation Modeling for Policy Support: An Application to Belgium and Possibilities for Japan

This paper starts by giving an overview of dynamic microsimulation modeling, and recent developments therein. It then discusses in more detail a recent trend in microsimulation research, which is to use alignment methodologies to simulate microsimulation models in conjunction with macro-economic models. The goal of this “top down-integrated approach” is to jointly assess the budgetary costs of demographic ageing and pension reform, as well as their consequences on the adequacy of pensions. The paper will then discuss in more detail how such integrated approach using shared demographic and macroeconomic assumptions has been developed in Belgium. It describes the dynamic microsimulation model MIDAS, highlighting how it aligns to the simulation results of the semi-aggregate model MALTESE. Finally, this paper suggests that the joint assessment using the joint application of two similar models might be useful to assess pension reform in the Japanese context.status: publishe