Social Security Module
Penn Wharton Budget Model's Social Security Module (PWBM-SS) uses a highly detailed simulation and projection of U.S. demographics from the Penn Wharton Budget Model Microsimulation model (PWBMsim).
Benefits
The module accounts for benefits rules covering retirees, child and adult dependents, widowers, divorced spouses, and disabled beneficiaries. Benefit calculations at claiming are validated against Social Security Administration calculators using thousands of scenarios, with accuracy verified to the penny. Subsequent benefits are increased by a cost of living adjustment based on PWBM projections of CPI-W inflation.
Revenue
The system estimates worker numbers, composition, and earnings. Payroll taxes use the integrated Tax Module, accommodating income shifting responses to policy changes. The model undergoes extensive validation testing against U.S. historical data.
Dynamic Behavioral Responses
The dynamic OLG model estimates household behavioral responses to reforms, including work and savings decisions. It incorporates forward-looking households with calibrated income distributions and demographic attributes, accounting for income and longevity uncertainty while allowing analysis of unbalanced policy reforms.