microDEMS

microDEMS (Demographic Change, Employment and Social Security) is a dynamic microsimulation model designed for a variety of applications relating to the sustainability and adequacy of the Austrian welfare state and the future size and composition of the population and workforce. The model is based on detailed administrative records of employment histories. It also implements detailed institutionalised settings, such as retirement regulations and the Austrian education system. The model starts with a representative cross-sectional population database created using micro-census data. Additionally, information on individuals' health and previous employment histories is imputed from longitudinal administrative social security data. Demographic projections reproduce official Statistic Austria population projections, considering international migration by place of birth and, in the case of emigration, duration of stay. Unlike the official population projections, microDEMS adds realism by explicitly accounting for educational differences in fertility and mortality. Core processes implemented in microDEMS include detailed educational careers, accounting for parental and migration background, as well as detailed longitudinal work histories. The latter distinguish seven labour market states, categorising employment by sector, public service, self-employment, unemployment, as well as out-of-labour-force and retirement states. Activity transition models account for state duration, the presence and age of children in the family, education, and health. MicroDEMS model is used for a wide range of studies, including the economic integration of immigrants, the elderly in the labour force, labour force projections and the effects of pension reform on the labour force. Technically, the model is based on the comparative microWELT (www.microWELT.eu) modelling platform. The model is in active development and is currently being extended to cover earning careers, individual pension accounts and pensions.