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Dynamic programming model estimates of Social Security Disability Insurance application timing

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Author Info

  • Richard V. Burkhauser

    (Department of Policy Analysis and Management, Cornell University, USA)

  • J. S. Butler

    (College of Pharmacy and Martin School of Public Policy and Administration, University of Kentucky, USA)

  • Gulcin Gumus

    (IZA, Institute for the Study of Labor, Bonn, Germany)

Abstract

This paper develops a dynamic programming model of the Social Security Disability Insurance (SSDI) application timing decision. We estimate the time to application from the point at which a health condition first begins to affect the kind or amount of work that a currently employed person can do. We use Health and Retirement Study (HRS) and restricted access Social Security earnings data for estimation. Our results show that the type of work-limiting health condition, presence of employer accommodation, and the relative value of income in the application state to income in the work state significantly affect the timing of SSDI application. Copyright © 2004 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/jae.804
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File URL: http://qed.econ.queensu.ca:80/jae/2004-v19.6/
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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Journal of Applied Econometrics.

Volume (Year): 19 (2004)
Issue (Month): 6 ()
Pages: 671-685

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Handle: RePEc:jae:japmet:v:19:y:2004:i:6:p:671-685

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References

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  1. Kreider, Brent & Riphahn, Regina, 2000. "Explaining Applications to the U.S. Disability Program: A Semiparametric Approach," Staff General Research Papers 5184, Iowa State University, Department of Economics.
  2. Lucas, Robert Jr, 1976. "Econometric policy evaluation: A critique," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 1(1), pages 19-46, January.
  3. Kreider, Brent, 1998. "Workers' Applications to Social Insurance Programs When Earnings and Eligibility Are Uncertain," Journal of Labor Economics, University of Chicago Press, vol. 16(4), pages 848-77, October.
  4. David C. Stapleton & Richard V. Burkhauser (ed.), 2003. "The Decline in Employment of People with Disabilities: A Policy Puzzle," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number depd.
  5. Bound, John & Burkhauser, Richard V., 1999. "Economic analysis of transfer programs targeted on people with disabilities," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 51, pages 3417-3528 Elsevier.
  6. Benitez-Silva, Hugo & Buchinsky, Moshe & Chan, Hiu Man & Rust, John & Sheidvasser, Sofia, 1999. "An empirical analysis of the social security disability application, appeal, and award process," Labour Economics, Elsevier, vol. 6(2), pages 147-178, June.
  7. Halpern, Janice & Hausman, Jerry A., 1986. "Choice under uncertainty: A model of applications for the social security disability insurance program," Journal of Public Economics, Elsevier, vol. 31(2), pages 131-161, November.
  8. Gruber, Jonathan & Kubik, Jeffrey D., 1997. "Disability insurance rejection rates and the labor supply of older workers," Journal of Public Economics, Elsevier, vol. 64(1), pages 1-23, April.
  9. Parsons, Donald O, 1980. "The Decline in Male Labor Force Participation," Journal of Political Economy, University of Chicago Press, vol. 88(1), pages 117-34, February.
  10. Jonathan Gruber & Jeffrey D. Kubik, 1994. "Disability Insurance Rejection Rates and the Labor Supply of Older Workers," NBER Working Papers 4941, National Bureau of Economic Research, Inc.
  11. Berkovec, James & Stern, Steven, 1991. "Job Exit Behavior of Older Men," Econometrica, Econometric Society, vol. 59(1), pages 189-210, January.
  12. John Bound & Richard Burkhauser & Austin Nichols, 2001. "Tracking the Household Income of SSDI and SSI Applicants," Working Papers wp009, University of Michigan, Michigan Retirement Research Center.
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Cited by:
  1. Nicolas R. Ziebarth & Martin Karlsson, 2009. "The Effects of Expanding the Generosity of the Statutory Sickness Insurance System," SOEPpapers on Multidisciplinary Panel Data Research 245, DIW Berlin, The German Socio-Economic Panel (SOEP).
  2. Laura Turner & Giovanni Gallipoli, 2010. "Household Responses to Individual Shocks: Disability, Labour Supply," 2010 Meeting Papers 110, Society for Economic Dynamics.
  3. Iskhakov, Fedor, 2008. "Dynamic Programming Model of Health and Retirement," Memorandum 03/2008, Oslo University, Department of Economics.
  4. Richard V. Burkhauser & Lauren H. Nicholas & Maximilian D. Schmeiser, 2011. "The Importance of State Anti-Discrimination Laws on Employer Accommodation and the Movement of their Employees onto Social Security Disability Insurance," Working Papers wp251, University of Michigan, Michigan Retirement Research Center.
  5. Michele Belloni & Rob Alessie, 2013. "Retirement Choices in Italy: What an Option Value Model Tells Us," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 75(4), pages 499-527, 08.
  6. Giovanni Gallipoli & Laura Turner, 2009. "Household Responses to Individual Shocks: Disability and Labor Supply," Working Papers 2009.97, Fondazione Eni Enrico Mattei.
  7. Mauro Mastrogiacomo & Nicole Bosch, 2006. "Income incentives to labour participation and home production; the contribution of the tax credits in the Netherlands," CPB Discussion Paper 59, CPB Netherlands Bureau for Economic Policy Analysis.
  8. Xiaoyan Li & Nicole Maestas, 2008. "Does the Rise in the Full Retirement Age Encourage Disability Benefits Applications? Evidence from the Health and Retirement Study," Working Papers wp198, University of Michigan, Michigan Retirement Research Center.
  9. Barbara Hanel, 2011. "The Effect of Disability Pension Incentives on Early Retirement Decisions," Melbourne Institute Working Paper Series wp2011n05, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  10. Mark van Duijn & Maarten Lindeboom & Mauro Mastrogiacomo & M. Lundborg, 2009. "Pension plans and the retirement replacement rates in the Netherlands," CPB Discussion Paper 118, CPB Netherlands Bureau for Economic Policy Analysis.
  11. Laura Turner & Giovanni Gallipoli, 2011. "Social Security, Endogenous Retirement, and Intrahousehold Cooperation," 2011 Meeting Papers 935, Society for Economic Dynamics.
  12. Li, Jinjing & O'Donoghue, Cathal, 2011. "Retirement Choice Simulation in Household Settings with Heterogeneous Pension Plans," IZA Discussion Papers 5866, Institute for the Study of Labor (IZA).
  13. Ashok Thomas & Luca Spataro, 2013. "Pension funds and Market Efficiency: A review," Discussion Papers 2013/164, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
  14. Frank van Erp & Niels Vermeer & Daniel van Vuuren, 2013. "Non-financial determinants of retirement," CPB Discussion Paper 243, CPB Netherlands Bureau for Economic Policy Analysis.

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