Thomas Horvath - Projecting changes in the size and composition of the Austrian labor force based on the dynamic microsimulation model microDEMS

  • Presenting author: Thomas Horvath (Austrian Institute for Economic Research (WIFO))

  • Authors: Thomas Horvath, Martin Spielauer

  • Session: B02A - Population [2] - Tuesday 11:00-12:30 - Ceremonial Hall

Accurately capturing the heterogeneity of individual life courses and labor market careers can considerably improve projections of the future size and structure of the labor force. Based on the microsimulation model microDEMS - a refined version of the international comparative model microWELT ( - we incorporate longitudinally consistent labor market careers, where transitions between different labor market states depend on a set of personal characteristics as well as the duration of the current labor market state. Based on detailed longitudinal social security data we estimate a series of hazard rate models, that allow us to accurately model realistic labor market careers, and in turn, realistic labor market exits due to retirement or permanent invalidity. Besides simulating how the size and composition of the workforce evolves over time, the model supports a wide range of what-if scenarios allowing us to assess the sensitive of our results with respect to changes in the underlying model parameters.