An Agent-Based Model for Exploring Pension Law and Social Security Policies

Abstract

The increase in life expectancy and the decrease in birth rates pose a structural challenge for the pension systems of developed countries such as Japan and Spain. Pension law and social security system of these countries is complex. Moreover, describing or predicting the effects of changes in these laws is even more challenging. We contribute with an agent-based model (ABM) for computer-aided law education in this field. This model is a simplified representation of the complex reality of pension systems, to the point that the reality is more understandable and analytically manageable. The proposed model extends the wealth distribution scenario in the Sugarscape model, which is considered the first social simulation where the notion of modeling people was extended to consider entire cities. The proposed ABM encourages the exploration about different theories for the sustainability of pension systems through experimentation in a simple and controllable scenario. Experimental results indicate that a constant or increasing population of uniformly distributed ages is not enough to ensure the sustainability of pension systems as backbone of the welfare state. A Web version of model implementation as well as its source code, documentation, and extended experiments are available online.