Structural Policy Evaluation
IZA's research team "Structural Policy Evaluation" simulates the effects of policy evaluations that can only be understood when considering the forward-looking behavior of households. For example, policy makers pondering changes to the pension system need to take into account the incentive effects these changes create for current and future workers. A policy that would be very sensible from the perspective of the stable labor market biographies of current pensioners might create havoc for cohorts in the gig economy. Balancing current costs (e.g., additional pension contributions) against future benefits (e.g., higher pension payments) requires dynamic models, which are very expensive computationally. The research team uses cutting-edge techniques from economics and computer science to understand the labor supply and welfare effects of policies like
- making the pension formula progressive or adding special rules for gap years;
- changing the long-term care insurance scheme; or
- introducing a universal basic income.
Prof. Dr. Hans-Martin von Gaudecker (Team Leader)