Projecting Family Formation and Dissolution in a Dynamic Microsimulation Model

Kevin Perese, Congressional Budget Office (CBO)
Josh O'Harra, Congressional Budget Office (CBO)

Dynamic microsimulation models create long-run population projections based on annual micro-level transitions into and out of various demographic and economic states. Within most microsimulation models, a module (or set of modules) exists to create new families and to dissolve existing families. This paper details the set of modules created for the Congressional Budget Office's Long-Term (CBOLT) Model to simulate family formation and dissolution over a 75-year time horizon. The process includes three steps: 1) the selection of individuals, among those at risk of marriage, to become married, 2) given an annual marriage market, the creation of unions with realistic joint-distributions of spousal characteristics via a computationally efficient mate-matching algorithm, and 3) given the characteristics of a married couple and the duration of marriage, the dissolution of marriages through divorce. The estimation techniques, model applications, and results are presented in detail.