Microsimulation Model ELSI
ELSI is a dynamic microsimulation model that can be used to produce information on the development of the Finnish pension system. The model is based on data on individuals.
ELSI supplements the long-term projection (LTP) model of the Finnish Centre for Pensions. The LTP model describes the development of the pension system at a semi-aggregated level. In addition to average-level results, the ELSI model can be used to generate information on the distributions of pensions and replacement rates. The model can also be used to describe more specific groups based on criteria such as the level of education.
Microsimulation is based on individual-level data. The base population in the ELSI model consists of the total adult population of Finland. The model depicts both pension recipients and those still in working life. The working life of each individual is simulated one year at a time. The size of the pension for each individual is calculated based on the pension accrued during the individual’s working life.
The model can also be used to assess and analyse changes in the pension system or the underlying demographic or macroeconomic conditions.
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