ABSTRACT
This chapter describes the work undertaken in constructing the labour market module and highlights generic lessons that can be drawn from this work. In the SAGE model, individuals were subjected to employment dynamics from the year after they leave education, at an age between 16 and 22, until the year they retire, at 65. The employment transitions took place on a quarterly basis, as this modelling choice facilitated accounting for sub-annual changes in employment. The implementation part of the labour market module had been the most demanding part of the work undertaken in the SAGE model. The labour market module is a key element of every dynamic microsimulation model. Its requirements are manifold, including estimation of parameters of employment transitions and earnings dynamics from the existing datasets and undertaking all imputations necessary in the base dataset to enable the implementation of the labour market event.
