Figures and data in Microsimulation for Public Policy. Experiences from the Swedish Model SESIM

Abstract

This paper reviews policy applications of the Swedish microsimulation model SESIM. These applications include studies of grants and loans to students, redistribution through the public sector and in particular the consequences of population ageing. The paper also discusses the structure and properties of SESIM and demonstrates how the model can be used to evaluate alternative policies.

This article contains 14 figures and 10 tables.

Figures

**Figure 1.** Structure of SESIM (Source Flood (2008a)). Note: The module “Noncash benfits” was not used in the project on population ageing, it was instead replaced by the module “Health and care of elderly”.

**Figure 2.** Public sector balances for people born in 1930-2009. (SEK, average per year of survival in Sweden adjusted for price changes and real growth.)

**Figure 3.** Simulated average days of inpatient care by age 50-100 for the birth cohorts of 1930, 1940, and 1950. Men and women, respectively. Source: Figure 10.2 in Bolin et al. (2008c).

**Figure 4.** Simulated development of total number of days of inpatient care for the total Swedish population, by gender. Source: Figure 10.7 in Bolin et al. (2008c).

**Figure 5.** Simulated population shares in work, retirement and disability; all age groups. Source: Figure 5 in Bolin et al. (2008b).

**Figure 6.** Average transition age to old-age retirement by gender using two alternative scenarios. Source: Figure 10 in Bolin et al. (2008b)

**Figure 7.** Financial and real wealth and cost of housing in SESIM. Source: Figure 1 in Flood and Klevmarken (2008).

**Figure 8.** Mean net wealth by period and age of the oldest in the household (SEK in 1999 prices). Source: Figure 3 in Flood and Klevmarken (2008).

**Figure 9.** Simulated health status 2000-2040 for people aged 75+. (Population shares by health status and year.). Source: Figure 13 in Bolin et al. (2008a).

**Figure 10.** Total number of elderly with around-the-clock care 2000-2039 (1000s). Source: Figure 6 in Fransson et al. (2008).

**Figure 11.** Total number of elderly with home help 2000-2039 (1000s). Source: Figure 6 in Fransson et al. (2008).

**Figure 12.** Average taxable income for retired relative to the average taxable income of working cohorts aged 20-64, by birth cohort and calendar year. Source: Figure 11 in Flood et al. (2008).

**Figure 13.** Poverty share by birth cohort and age (equivalized disposable income less than 50 % of the median income of the adult population). Source: Figure 14 in Flood et al. (2008).

**Figure 14.** Share of elderly living close to adult children. Source: Figure 2 in Fransson et al. (2008).

Tables

Table 1. Life-cycle incomes and return to higher education.

	Non university program		Short university program		Long university program
	Males	Females	Males	Females	Males	Females
Life-cycle income (1000 SEK)	6974	5120	7727	5911	8861	6752
Total return to education (1000 SEK)	0	0	753	790	887	631
Rate of return to education per year %			6.0	8.7	4.9	6.3

Source: Table 5.2, Ericson and Hussénius, 2000.

Table 2. Share of students with loans who get their loans remitted at the age of 65 by gender and length of schooling.

	Interest rate (%)
	0	1.3	2.8
Males	7.6	21.7	38.2
Females	26.1	41.4	53.2
Less than university	5.0	7.4	13.2
Short university	4.4	11.1	17.7
Long university	23.3	41.8	58.8

Source: Tables 5.7 and 5.8 in Ericson and Hussénius, 2000.

Table 3. Gini coefficients by income concepts.

	Annual income	Life-cycle income
Market income	0.490	0.196
Equivalent disposable income	0.217	0.102
- Indirect taxes	0.224	0.104
+ Non-cash benefits	0.189	0.086

Source: Table 1, Pettersson and Pettersson (2007).

Table 4. Gains and losses through the public sector by gender and income quintile (1000 SEK in 2003 price level).

	Men	Women	Quintiles of Life-cycle income					All
	Men	Women	Q1	Q2	Q3	Q4	Q5	All
Taxes	7136	6389	4264	5741	6597	7691	9483	6758
Transfers	3562	4085	3924	3983	3915	3770	3543	3827
Non-cash benefits	2611	3245	2840	3109	3109	2922	2679	2932
Net effect	-963	941	2500	1351	428	-999	-3262	0

Source: Tables 4 and 5, Pettersson and Pettersson (2007).

Table 5. Average and total number of inpatient hospital days for people 65+ by year.

Year	Average no of days			Total no of days (1000)
Year	Base scenario	Improved health	Improved health & lower death risks	Base scenario	Improved health	Improved health & lower death risks
2000	3.2	3.3	3.2	4954	5068	4990
2020	3.2	3.1	3.5	6495	6270	8117
2040	3.4	2.9	4.0	8396	7241	12087

Source: Table 3 in Klevmarken (2008b).

Table 6. Total expenditures for inpatient care, home help and institutionalized care for people 65+.

Year	Total expenditures (millions of SEK in fixed prices)	Total expenditure as share of the sum of direct taxes from households (%)
2000	92231	20.5
2020	166719	24.9
2040	339297	36.2

Source: Table 6 in Klevmarken (2008b).

Table 7. Median equivalized disposable income of 65+ relative to the median income of 20-64, by year in two scenarios.

Year	Base scenario	High pension age
2000	0.709	0.711
2020	0.634	0.693
2040	0.552	0.623

Source: Table 13 in Klevmarken (2008b).

Table 8. What income do those in most need of social care have? (Per cent of all 65+ in each form of care.).

Year/Kind of care	Quartiles of the distribution of disposable income for all adults
Year/Kind of care	1	2	3	4	All
2000
No care	46.7	30.8	14.1	8.4	100
Home help	68.6	18.7	7.1	5.6	100
Institutionalized	65.5	22.2	8.0	4.3	100
2040
No care	53.1	30.7	10.9	5.3	100
Home help	75.4	17.6	3.8	3.2	100
Institutionalized	76.4	14.7	4.6	4.2	100

Source: Table 17 in Klevmarken (2008b).

Table 9. How much wealth do those in most need of care have? (Per cent of all 65+ in each form of care).

Year/kind of care	Quartiles of the distribution of net worth for all adults
Year/kind of care	1	2	3	4	All
2000
No care	4.7	28.0	27.4	39.9	100
Home help	2.5	40.2	27.4	29.8	100
Institutionalized	2.0	39.9	25.8	32.3	100
2040
No care	12.0	17.4	20.8	49.9	100
Home help	12.4	20.1	18.2	49.3	100
Institutionalized	11.1	21.6	19.9	47.4	100

Source: Table 18 in Klevmarken (2008b).

Table 10. Poverty rates among people aged 65+, by type of assistance, year and scenario (%).

Scenario/year	Type of assistance
Scenario/year	No assistance	Help at home	All day Surveillance	All 65+
Base scenario
2000	1.5	1.4	2.5	1.6
2020	11.1	10.8	13.2	11.2
2040	14.3	15.1	16.3	14.5
Increased pension age
2000	1.7	2.6	2.2	1.8
2020	6.8	7.2	10.1	7.0
2040	7.9	9.8	12.0	8.3

Source: Table 20 in Klevmarken (2008b).