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The timing of disability insurance application: a choice-based semiparametric hazard model

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Abstract

We use a choice-based subsample of Social Security Disability Insurance applicants from the 1978 Social Security Survey of Disability and Work to test the importance of policy variables on the timing of application for disability insurance benefits following the onset of a work limiting health condition. We correct for choice-based sampling by extending the Manski-Lerman (1977) correction to the likelihood function of our continuous time hazard model defined with semiparametric unmeasured heterogeneity and find that this correction significantly affects the results. We find that economic variables-the size of the disability benefit, expected wage earnings and accommodation-matter.

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  • Richard V. Burkhauser & J. S. Butler & Yang-Woo Kim, 1996. "The timing of disability insurance application: a choice-based semiparametric hazard model," Working Papers 1996-005, Federal Reserve Bank of St. Louis.
    • Handle: RePEc:fip:fedlwp:1996-005
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    1. Parsons, Donald O, 1991. "The Health and Earnings of Rejected Disability Insurance Applicants: Comment," American Economic Review, American Economic Association, vol. 81(5), pages 1419-1426, December.
    2. Jonathan S. Leonard, 1985. "Labor Supply Incentives and Disincentives for the Disabled," NBER Working Papers 1744, National Bureau of Economic Research, Inc.
    3. Bound, John, 1991. "The Health and Earnings of Rejected Disability Insurance Applicants: Reply," American Economic Review, American Economic Association, vol. 81(5), pages 1427-1434, December.
    4. Parsons, Donald O, 1980. "The Decline in Male Labor Force Participation," Journal of Political Economy, University of Chicago Press, vol. 88(1), pages 117-134, February.
    5. Butler, J S & Anderson, Kathryn H & Burkhauser, Richard V, 1989. "Work and Health after Retirement: A Competing Risks Model with Semiparametric Unobserved Heterogeneity," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 46-53, February.
    6. Jonathan S. Leonard, 1979. "The Social Security Disability Program and Labor Force Participation," NBER Working Papers 0392, National Bureau of Economic Research, Inc.
    7. Heckman, James J. & Robb, Richard Jr., 1985. "Alternative methods for evaluating the impact of interventions : An overview," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 239-267.
    8. Manski, Charles F & Lerman, Steven R, 1977. "The Estimation of Choice Probabilities from Choice Based Samples," Econometrica, Econometric Society, vol. 45(8), pages 1977-1988, November.
    9. Marjorie Baldwin & William G. Johnson, 1994. "Labor Market Discrimination against Men with Disabilities," Journal of Human Resources, University of Wisconsin Press, vol. 29(1), pages 1-19.
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    Cited by:

    1. Richard V. Burkhauser & Joseph F. Quinn, 1997. "Implementing Pro-Work Policies for Older Americans in the Twenty-First Century," Boston College Working Papers in Economics 378, Boston College Department of Economics.
    2. repec:max:cprpbr:9 is not listed on IDEAS

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