1. Abstract¶

This contribution introduces the MicroWELT model developed alongside an international research program studying the distributional effects along the lifecycle of four welfare state regimes in the context of demographic change. MicroWELT is a portable continuous time interacting population model based on data readily available for many countries, most importantly the Euromod data base. While reproducing existing (Eurostat) demographic projections in aggregate outcomes, MicroWELT accounts for fertility and mortality differentials and differences in partnership careers by education. The resulting family-demographic and education projections are integrated with a longitudinal accounting framework based on the National Transfer Account (NTA) approach. National Transfer Accounts break down National Accounts by age and capture transfers within and between families and through the tax-benefit and social insurance system.

NTAs are heavily used in studies on the economic and policy implications of demographic change. In this paper, by means of a case study for Spain, we demonstrate how microsimulation can add realism to existing projections by accounting for education change as well as differential longevity and fertility patterns by education. Our analysis first reproduces a set of indicators and projection approaches found in existing literature based on aggregated NTA data. We then dis-aggregate these NTA data by education, school enrolment, and family characteristics. Combined with the corresponding detailed socio-demographic projections of MicroWELT, we explore how findings change.

KEYWORDS: MICROSIMULATION, WELFARE STATE, EDUCATION, DEMOGRAPHIC CHANGE, NATIONAL TRANSFER ACCOUNTS

JEL classification: E01, J11, P51, O57, C53