Simulation Model to Forecast Gender Pension Wealth Gap in the Light of Demographic Changes

The ageing of the population has forced changes in many areas of social policy, including pension systems. Countries are reforming their retirement policies in such a way that the size of pension benefits depends on the total period of employment, contributions made, and life expectancy. Due to the fact that in these types of system, employment plays a significant role in the accumulation of pension capital, a gender pay gap translates into a gender pension gap. In this article, we propose a hybrid simulation model to analyze the impact of long-term economic and demographic changes on the level of pension benefits when a worker retires, with a special focus on gender wealth pension gaps. The model combines demographic simulation conducted using a systems dynamics approach with discrete stochastic simulation by means of which we model the employment history of men and women. The model uses data from Polish statistical databases.