Transition Probabilities and Duration Analysis among Disability States: Some Evidence from Spanish Data
AbstractIn this paper we study the disability transition probabilities (as well as the mortality probabilities) due to concurrent factors to age such as income, gender and education. Although it is well known that aging and socioeconomic status influence the probability of causing functional disorders, surprisingly little attention has been paid to the combined effect of those factors along the individuals' life and how this affects the transition from one degree of disability to another. The assumption that tomorrow's disability state is only a function of the today's state is very strong, since disability is a complex variable that depends on several other elements than time. This paper contributes into the field in two ways: (1) by attending the distinction between the initial disability level and the process that leads to his course (2) by addressing whether and how education, age and income differentially affect the disability transitions. Using a Markov chain discrete model and a survival analysis, we estimate the probability by year and individual characteristics that changes the state of disability and the duration that it takes its progression in each case. We find that people with an initial state of disability have a higher propensity to change and take less time to transit from different stages. Men do that more frequently than women. Education and income have negative effects on transition. Moreover, we consider the disability benefits associated to those changes along different stages of disability and therefore we o er some clues on the potential savings of preventive actions that may delay or avoid those transitions. On pure cost considerations, preventive programs for improvement show higher benefits than those for preventing deterioration, and in general terms, those focusing individuals below 65 should go first. Finally the trend of disability in Spain seems not to change among years and regional differences are not found.
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Bibliographic InfoPaper provided by Barcelona Graduate School of Economics in its series Working Papers with number 643.
Date of creation: Jun 2012
Date of revision:
Markov transition; disability states; cost of disability; Spain; survival analysis;
Other versions of this item:
- Guillem López i Casasnovas & Catia Nicodemo, 2012. "Transition probabilities and duration analysis among disability states: Some evidence from Spanish data," Economics Working Papers 1327, Department of Economics and Business, Universitat Pompeu Fabra.
- J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
This paper has been announced in the following NEP Reports:
- NEP-AGE-2012-07-01 (Economics of Ageing)
- NEP-ALL-2012-07-01 (All new papers)
- NEP-LAB-2012-07-01 (Labour Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Sergi Jiménez-Martín & José M. Labeaga & Cristina Vilaplana, 2006.
"Award Errors and Permanent Disability Benefits in Spain,"
- Sergi Jimenez-Martin & Jose M. Labeaga & Cristina Vilaplana Prieto, 2007. "Award errors and permanent disability benefits in Spain," Health, Econometrics and Data Group (HEDG) Working Papers 07/04, HEDG, c/o Department of Economics, University of York.
- Sergi Jiménez-Martín & José M. Labeaga & Cristina Vilaplana Prieto, 2006. "Award errors and permanent disability benefits in Spain," Economics Working Papers 966, Department of Economics and Business, Universitat Pompeu Fabra.
- Richard V. Burkhauser & Mary C. Daly, 2001. "United States disability policy in a changing environment," Working Papers in Applied Economic Theory 2002-21, Federal Reserve Bank of San Francisco.
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