Behavioral Effects of Social Security Reform in a Dynamic Micro-Simulation with Life-Cycle Agents: Working Paper 2005-06

The Congressional Budget Office Long-Term (CBOLT) model uses dynamic micro-simulation to analyze Social Security policy. The version of CBOLT currently being used to analyze policy for the Congress incorporates micro behavioral effects insofar as agents alter their timing of initial claiming of Old Age Insurance (OAI) worker benefits when benefits change, and that has a direct impact on government outlays and a feedback on the macro economy through changes in labor supply. However, the change in benefit claim age is only one of three behavioral responses that could be considered in Social