1. An introduction to MIDAS
Instituto de Ciências Sociais
da Universidade de Lisboa Portugal, March 12 and 13th, 2015.
Gijs Dekkers
Federal Planning Bureau,
K U Leuven
& LISER
Joint work with Raphaël Desmet,
Nicole Fasquelle and Saskia Weemaes

2. MIDAS MIDAS Starting dataset ± 2.2K2 individuals in 2002
DEMOGRAPHIC
MODULE t
LABOUR MARKET
MODULE t
MIDAS
t=2002 to 2060
PENSION & BENEFITS
MODULE t
CONTRIBUTIONS AND TAXATION MODULE t
REDISTRIBUTION, POVERTY, INEQUALITY
OTHER OUTPUT

3. MIDAS: an overview
Starting dataset: individuals, grouped in households
(administrative data: 2.2 million individuals in 2001)
Demographic transitions
Birth, death, marriage, divorce, cohabitation, separation, ‘get a life’
Reduced-form aligned labour supply
Unemployment, disability, student, out of the labour market,
retired
Social security:
Unemployment, disability pension, CELS/UCA, child benefits, welfare benefits, …
Taxes and social contributions

4. The starting dataset of MIDAS
Administrative data of 304,000 individuals in 2001
Households
Links between individuals within households
Expanded using frequency weights to 2.2 million individuals
Cross sectional information in 2001
Labour market states in 2000
Retrospective information > 1949 for those working in the private sector
Other information
Immigration, emigration tables
160 parameters (2002-> 2060)
35 alignment tables (to age(group) and gender)

5. An example of an alignment table

6. Shall we dance? MIDAS and alignment
Macro model
S3BE
Semi-aggregate
model
MALTESE
Microsimulation
MIDAS
Demographic
projections
MALTDEMO
Parameter changes
Numbers/proportions* of individuals in
various states
Joint social
hypothesis
Alignment*
In policy assessment of social security systems, the traditional focus was on securing the financial sustainability. But a sensible assessment of financial sustainability cannot do without taking into account the social impact of ageing, budgetary and pension policy. Specifically should the development of pension adequacy be taken into account. Lusardi et al. (2008, 8) define a pension system to be adequate when it provides means for individual consumption smoothing, and reduces inequality and poverty.
A problem with this integrated approach, and generally a problem with the assessment of adequacy is that tools and models were not available.
State alignment procedures aim to replicate proportions or numbers of individuals in certain states; for example, the proportion of women in work, or the proportion of men in unemployment.
Even a well-specified microsimulation model may have trouble replicating aggregate time series.
Being able to replicate a “unchanged policy” variant does not necessarily mean that a microsimulation model will simulate properly the aggregates in the case of a policy variant or a technical variant.
- It is in the interest of the recipients of policy oriented research to develop microsimulation models that are complementary to macro-level models, instead of their (often not better) substitutes.

7. pathways of consistency with MALTESE
Alignment of state variables:
Procedure to have the model respect or ‘mimic’ exogenous aggregates while respecting individual probabilities in the occurrence of the event
Including “soft” and “hard” take and leave-procedures
Monetary alignment or ‘amount alignment’:
Proportional adjustment of first-run values of earnings to match exogenous macroeconomic productivity growth rates
Uprating on the basis of joint social hypothesis
Of social security benefits, parameters, etc…

8. MIDAS and alignment
what are the consequences of the WGA projections and hypotheses for prospective pension adequacy in Belgium?
The Ballad of East and West  Rudyard Kipling (1865–1936)     OH, East is East, and West is West, and never the twain shall meet, Till Earth and Sky stand presently at God’s great Judgment Seat; But there is neither East nor West, Border, nor Breed, nor Birth, When two strong men stand face to face, tho’ they come from the ends of the earth!

9. LIAM LIAM2 SMILE MIDAS MIDAS: a history T-DYMM MIDAS_LU MIDAS_BE
MIDAS_HU

10. MIDAS is being developed in LIAM2

11. LIAM2 Open source Google discussion groups Website
The program is free
The source code is free
Google discussion groups
Website
Being used in academics:
UK, NZL, China, Hong-Kong,
France, …?

12. Thank you very much obrigado pela sua atenção
An introduction to MIDAS
Thank you very much
obrigado pela sua atenção