Agent-Based Simulation for Pension System in Japan

Abstract

In this chapter, we carry out computational experiments to examine the Japanese public pension system from the perspective of both the macro and micro levels. In Japan, one of the most aging populations in the world, many studies have been conducted using computational simulations to evaluate the sustainability of the pension system under the condition of drastic demographic change. Although most of those studies including a governmental valuation of the pension system mainly focus on the macro-level outputs of simulations, they pay little attention to individuals in the pension system. In order to obtain the micro data of individuals, we develop an agent-based model for the Japanese public pension system using actual statistical data sets adopted from surveys by the Japanese government. In this chapter, we present the development of our simulation model and discuss the effectiveness of an agent-based approach to examine the pension scheme through our simulation results.