This volume, second in the series, provides essential background material for policy analysts, researchers, statisticians, and others interested in the application of microsimulation techniques to develop estimates of the costs and population impacts of proposed changes in government policies, ranging from welfare to retirement income to health care to taxes. The material spans data inputs to models, design and computer implementation of models, validation of model outputs, and model documentation. PANEL TO EVALUATE MICROSIMULATION MODELS FOR SOCIAL WELFARE PROGRAMS ERIC A. HANUSHEK (Chair), Department of Economics, University of Rochester DAVID M. BETSON, Department of Economics, University of Notre Dame LYNNE BILLARD, Department of Statistics, University of Georgia SHELDON DANZIGER, Institute of Public Policy Studies, University of Michigan EUGENE P. ERICKSEN, Department of Sociology, Temple University THOMAS J. ESPENSHADE, Office of Population Research, Princeton University HARVEY GALPER, KPMG Peat Marwick, Washington, D.C. LOUIS GORDON, Department of Mathematics, University of Southem Califomia KEVIN M. HOLLENBECK, W.E. Upjohn Institute for Employment Research, Kalamazoo, Mich. GORDON H. LEWIS, School of Urban and Public Affairs, Carnegie Mellon University ROBERT MOFFITT, Department of Economics, Brown University GAIL R. WILENSKY, Health Care Financing Administration, U.S. Department of Health and Human Services [served until January 1990] MICHAEL C. WOLFSON, Analyfical Studies Branch, Statistics Canada CONSTANCE F. CITRO, Study Director MICHAEL L. COHEN, Consultant CHRISTINE M. ROSS, Research Associate AGNES E. GASKIN, Administrative Secretary CONTENTS INTRODUCTION DATABASES AND METHODS OF DATA ENHANCEMENT 1 Databases for Microsimulation: A Comparison of the March CPS and SIPPConstance F Citro 2 Statistical Matching and Microsimulation ModelsMichael L. Cohen MODEL DESIGN 3 Alternative Model Designs: Program Participation Functions and the Allocation of Annual to Monthly Values in TRIM2, MATH, and MTSMConstance F. Citro and Christine M. Ross 4 DYNASIM and PRISM: Examplcs of Dynamic ModelingChristine M. Ross COMPUTING TECHNOLOGY 5 Future Computing Environments for Microsimulation ModelingPaul Cotton and George Sadowsky MODEL VALIDATION 6 Variance Estimation of Microsimulation Models Through Sample Reuse Michael L. Cohen 7 Evaluations of Microsimulation Models: Literature ReviewMichael L. Cohen 8 A Validation Experiment With TRIM2Michael L. Cohen, Lynne Billard, David M. Betson, and Eugene P. Ericksen 9 Evaluating the Accuracy of U.S. Population Projection ModelsLaurence Grummer-Strawn and Thomas J. Espenshade MODEL DOCUMENTATION 10 Documentation for Microsimulation Models: TRIM2, MATH, and HITSMKevin M. Hollenbeck