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Disability Status as an Unobservable: Estimates From a Structural Model

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  • Robert Haveman
  • Barbara Wolfe
  • Fung Mey Huang

Abstract

We propose an index of "true disability" by treating disability status as an unobservable phenomenon which is both causally related to a number of exogenous characteristics of an individual and correlated with a number of observed indicators of health, impairment and qualifications for employment. First, we define true disability and distinguish it from related concepts. We then discuss the importance of an objective and reliable measure of disability for research on the determinants of behavior. Next, we present the specification of our structural model for estimating true disability as a latent variable. Finally, we report the results of our estimation in a simple model of Labor force participation, and compare the effect of using the constructed index and a self-reported disability measure on understanding the determinants of behavior and choice.

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File URL: http://www.nber.org/papers/w2831.pdf
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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 2831.

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Date of creation: Jan 1989
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Handle: RePEc:nbr:nberwo:2831

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  1. Haveman, Robert H & Wolfe, Barbara L, 1984. "The Decline in Male Labor Force Participation: Comment," Journal of Political Economy, University of Chicago Press, vol. 92(3), pages 532-41, June.
  2. Jonathan S. Leonard, 1985. "Labor Supply Incentives and Disincentives for the Disabled," NBER Working Papers 1744, National Bureau of Economic Research, Inc.
  3. Kathryn H. Anderson & Richard V. Burkhauser, 1985. "The Retirement-Health Nexus: A New Measure of an Old Puzzle," Journal of Human Resources, University of Wisconsin Press, vol. 20(3), pages 315-330.
  4. Parsons, Donald O, 1982. "The Male Labour Force Participation Decision: Health, Reported Health, and Economic Incentives," Economica, London School of Economics and Political Science, vol. 49(193), pages 81-91, February.
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Cited by:
  1. Debra Sabatini Dwyer & Olivia S. Mitchell, 1998. "Health Problems as Determinants of Retirement: Are Self-Rated Measures Endogenous?," NBER Working Papers 6503, National Bureau of Economic Research, Inc.

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