Assessing Health Inequalities Using a Dynamic Microsimulation Model

Abstract

The paper describes stage 1 of the development of a Health Module to a dynamic microsimulation model which simulates individuals' life cycles. The life cycle approach has been shown in the literature to be important when studying health inequalities. The enhanced model accounts for the links between Australians' socio-economic status and their health. The full model, which is able to project 20 to 30 years into the future, is based on a 1 per cent unit record Census sample of the Australian population. <p> Health is measured using information on individuals' disability status, which in turn is linked to their life expectancy. Both disability and life expectancy are estimated for each individual as a function of age, gender and socio-economic status. Socio-economic status is measured using the ‘Index of Relative Socio-economic Disadvantage’ (developed by the Australian Bureau of Statistics), and/or an index based on families' incomes and assets (being especially developed for this project). <p> The paper also touches on proposed further developments of the Health Module and lists a range of studies that could be attempted once that Module is completed. Such studies could for example compare the demographic, labour force, financial and distributional impacts of proposed policies that aim to lower health inequalities – and do that more accurately and at a much greater level of detail than was possible previously.