Means testing plays an important role in the UK state pension system. We use a dynamic programming model to consider the long-term behavioural effects of a recent policy reform that reduced the marginal tax rates on private income of means tested retirement benefits from 100% to 40%. Our...

This study uses a stylised simulation model to consider potential behavioural responses to the reduction in pension taper rates associated with replacing the Minimum Income Guarantee (MIG) with the Pension Credit (PC). A range of long-run responses to the policy change are identified, summarised...

The design of welfare benefits is a tricky business. In this respect, James Meade placed particular emphasis on the importance of avoiding excessive distortions to the price of labour. Nevertheless, Meade noted that means testing is likely to be desirable in view of the “hideously expensive”...

We develop a simulation model of household behaviour in which both the consumption/saving and labour/leisure choices are endogenous. This model is used to explore the effects of the UK and Danish state tax and benefit systems on the labour supply of old and older workers.We find that, in broad...

We develop a simulation model of household behaviour in which both the consumption/saving and labour/leisure choices are endogenous. This model is used to explore the effects of the UK and Danish state tax and benefit systems on the labour supply of workers aged 50 or over. We find that, in...

This paper describes a fully behavioural microsimulation model that has recently been developed at the National Institute for considering responses to changes in pension policy of household savings and labour supply. The model generates household decisions regarding labour/leisure, and...

The importance of contemporary trends in fertility and female labour supply is well recognised. Unfortunately, our understanding of these inter-related phenomena has been hampered by the difficulties that are associated with formulating a structural model of behaviour that reflects the joint...

This paper discusses the way in which payments from pooled annuity funds need to be adjusted to take account of the fact that future mortality rates are uncertain. Mortalityadjusted annuities, as we describe payments from the pooled fund are variable annuities in which aggregate mortality risk...

A dynamic microsimulation model of cohort earnings based on the Australian population aged between 20 and 55 years is described. A highly parsimonious modular structure is adopted to facilitate sensitivity analysis and enable additional characteristics to be added, should they be desired....