Projecting Longitudinal Earnings Patterns for Long-Run Policy Analysis: Technical Paper 2003-02

This paper presents a method for projecting person-level labor force participation and earnings for the U.S. population in a dynamic micro-simulation setting. A dynamic micro-simulation model starts with economic and demographic data for a current sample of the population, then stochastically "ages" that sample forward through time, ultimately generating a longitudinal micro data file, which is useful for studying Social Security and other long-term issues. The stochastic projections described here proceed in four steps: in each year, every person is sequentially assigned labor force