LINDA: A dynamic microsimulation model for analysing policy effects on the evolving population cross-section

This paper describes a structural dynamic microsimulation model that generates individual-specifi…c data over a range of demographic and economic characteristics at discrete intervals through-out a simulated time horizon. The model is designed to analyse the distributional implications of policy alternatives over appreciable periods of time. This focus motivates endogenous simulation of savings and labour supply decisions, taking explicit account of uncertainty regarding the evolving decision environment. In contrast to the existing literature of savings in context of uncertainty, the model described here takes an overlapping generations form which is adapted to the needs of policy makers, and which has distinct advantages for empirical investigations.