Mahler & Yum (2024)

Example implementation of the lifecycle model from Mahler & Yum (2024).

Three regimes represent working life, mandatory retirement from age 65, and death. The working regime has nine states: wealth, health, productivity shock, lagged effort, education, productivity type, health type, and discount type, plus phase-specific derived quantities. Its continuous effort and consumption choices form a nested EGM-family problem; the paper implementation declares working and retirement as NestedConsumptionSavingsRegime objects. The model features stochastic health and regime transitions, AR(1) productivity shocks, and discount-factor heterogeneity. It ships with calibrated data files for survival probabilities and initial distributions.

View paper-mode source on GitHub

Paper-mode usage¶

from lcm_examples.mahler_yum_2024 import START_PARAMS, create_inputs
from lcm_examples.mahler_yum_2024.paper import (
    adapt_params_to_paper_mode,
    create_mahler_yum_model,
)

model = create_mahler_yum_model(implementation="paper")
model_params, initial_conditions = create_inputs(
    seed=7235,
    n_simulation_subjects=1_000,
    params=START_PARAMS,
)
model_params = adapt_params_to_paper_mode(model_params)

result = model.simulate(
    params=model_params,
    initial_conditions=initial_conditions,
    log_level="debug",
    seed=8295,
)

This is the principal economic implementation. It uses a continuous outer effort margin and an inner non-convex-budget EGM solve. See Nested endogenous-grid methods and Declared non-convex budgets for the two layers.

Historical grid-search baseline¶

MAHLER_YUM_MODEL remains available for labeled brute-force and historical comparisons:

from lcm_examples.mahler_yum_2024 import MAHLER_YUM_MODEL

grid_search_baseline = MAHLER_YUM_MODEL

Do not substitute this baseline when the paper-mode specialized declaration is the object being studied.