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Imperfect Tagging Revisited

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  • Rehn, Eric

    ()
    (Department of Economics, Lund University)

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    Abstract

    Revisiting Parsons' 1996 article about disability insurance with imperfect tagging in a two type-economy -- individuals are either able or disabled. Here Parsons' analysis is extended in several directions. The model is generalized to allow for different utility functions over work status. The analysis extends to three different cases of a two-type economy. Finally Parsons' model is extended to three types: able, partially disabled and disabled - adapting the model to disability insurances allowing for more than two degrees of disability. The results are consistent with Parsons', but a complete ranking of the consumption allocations cannot be achieved in the general case.

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    File URL: http://project.nek.lu.se/publications/workpap/Papers/WP07_2.pdf
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    Bibliographic Info

    Paper provided by Lund University, Department of Economics in its series Working Papers with number 2007:2.

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    Length: 36 pages
    Date of creation: 19 Feb 2007
    Date of revision:
    Handle: RePEc:hhs:lunewp:2007_002

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    Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund,Sweden
    Phone: +46 +46 222 0000
    Fax: +46 +46 2224613
    Web page: http://www.nek.lu.se/en
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    Related research

    Keywords: social insurance; imperfect tagging; partial disability;

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    References

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    1. Sheshinski, E. & Diamond, P., 1992. "Economic Aspects of Optimal Disability Benefits," Working papers 92-5, Massachusetts Institute of Technology (MIT), Department of Economics.
    2. Hugo Benitez-Silva & Moshe Buchinsky & John Rust, 2004. "How Large are the Classification Errors in the Social Security Disability Award Process?," NBER Working Papers 10219, National Bureau of Economic Research, Inc.
    3. Salanie, Bernard, 2002. "Optimal demogrants with imperfect tagging," Economics Letters, Elsevier, vol. 75(3), pages 319-324, May.
    4. Diamond, P. A. & Mirrlees, J. A., 1978. "A model of social insurance with variable retirement," Journal of Public Economics, Elsevier, vol. 10(3), pages 295-336, December.
    5. Parsons, Donald O., 1996. "Imperfect 'tagging' in social insurance programs," Journal of Public Economics, Elsevier, vol. 62(1-2), pages 183-207, October.
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