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Inferring Disability Status from Corrupt Data

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  • John Pepper

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  • Brent Kreider

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Abstract

We investigate what can be learned about the prevalence of work disability using self-reported assessments of work capacity. Although health status is widely recognized as a crucial determinant of labor supply behavior and participation in public transfer programs, there is a long-standing debate about the reliability of self-reported indicators. Anderson and Burkhauser (1985), in fact, labeled the appropriate use of health controls “the major unsettled issue in the empirical literature on the labor supply of older workers,” and the debate has only grown stronger over time. Rather than focus on assumptions required to obtain point identi…cation, we take a step back to evaluate what can be inferred about disability rates under a variety of assumptions that are weaker but arguably more credible than those imposed in the existing literature. Extending the work on corrupt samples developed by Horowitz and Manski (1995), we develop a set of nonparametric bounds that, in the most basic setting, require only prior information restricting the fraction of persons who might misreport disability. These bounds inform the ongoing debate by e¤ectively constraining the range of uncertainty regarding the e¤ects of inaccurate reporting on inferences. The results clearly show that the strength of the conclusions one can draw depend directly on the strength of the assumptions one is willing to impose. Under minimal assumptions, the bounds are nearly uninformative. Tighter bounds can be obtained with additional assumptions. Under the assumption that the true disability rate is nondecreasing with age, our results imply that conventional participation models which presume valid self-reports may be misspeci…ed.

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File URL: http://www.virginia.edu/economics/RePEc/vir/virpap/papers/virpap354.pdf
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Bibliographic Info

Paper provided by University of Virginia, Department of Economics in its series Virginia Economics Online Papers with number 354.

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Length: 19 pages
Date of creation: Aug 2001
Date of revision:
Handle: RePEc:vir:virpap:354

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Web page: http://www.virginia.edu/economics/home.html

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  1. Kreider, Brent & Pepper, John V., 2003. "Disability and Employment: Reevaluating the Evidence in Light of Reporting Errors," Staff General Research Papers 10229, Iowa State University, Department of Economics.
  2. 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.
  3. Charles F. Manski & John V. Pepper, 1998. "Monotone Instrumental Variables: With an Application to the Returns to Schooling," Virginia Economics Online Papers 308, University of Virginia, Department of Economics.
  4. Kreider, Brent, 2000. "Behavioral Responses to Changes in Federal Disability Policy: The Role of Measured Disability on Inferences," Staff General Research Papers 5396, Iowa State University, Department of Economics.
  5. 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.
  6. 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.
  7. Debra S. Dwyer & Olivia S. Mitchell, . "Health Problems as Determinants of Retirement: Are Self-Rated Measures Endogenous?," Pension Research Council Working Papers 98-7, Wharton School Pension Research Council, University of Pennsylvania.
  8. Arie Kapteyn & James P. Smith & Arthur van Soest, 2005. "Self-reported Work Disability in the US and The Netherlands," Labor and Demography 0504006, EconWPA.
  9. 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.
  10. Bollinger, Christopher R., 1996. "Bounding mean regressions when a binary regressor is mismeasured," Journal of Econometrics, Elsevier, vol. 73(2), pages 387-399, August.
  11. Hugo Benitez-Silva & Moshe Buchinsky & Hiu Man Chan & Sofia Cheidvasser & John Rust, 2000. "How Large is the Bias in Self-Reported Disability?," Working Papers 2000-01, Brown University, Department of Economics.
  12. Kreider, Brent, 2006. "Partially Identifying the Prevalence of Health Insurance Given Contaminated Sampling Response Error," Staff General Research Papers 12588, Iowa State University, Department of Economics.
  13. Manski, C.F., 1992. "Identification Problems in the Social Sciences," Working papers 9217, Wisconsin Madison - Social Systems.
  14. Kreider, Brent, 1999. "Latent Work Disability and Reporting Bias," Staff General Research Papers 5185, Iowa State University, Department of Economics.
  15. 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.
  16. Molinari, Francesca, 2008. "Partial identification of probability distributions with misclassified data," Journal of Econometrics, Elsevier, vol. 144(1), pages 81-117, May.
  17. Horowitz, Joel L & Manski, Charles F, 1995. "Identification and Robustness with Contaminated and Corrupted Data," Econometrica, Econometric Society, vol. 63(2), pages 281-302, March.
  18. Parsons, Donald O, 1991. "The Health and Earnings of Rejected Disability Insurance Applicants: Comment," American Economic Review, American Economic Association, vol. 81(5), pages 1419-26, December.
  19. Bound, John, 1991. "The Health and Earnings of Rejected Disability Insurance Applicants: Reply," American Economic Review, American Economic Association, vol. 81(5), pages 1427-34, December.
  20. 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.
  21. John Bound, 1991. "Self-Reported Versus Objective Measures of Health in Retirement Models," Journal of Human Resources, University of Wisconsin Press, vol. 26(1), pages 106-138.
  22. Steven Stern, 1989. "Measuring the Effect of Disability on Labor Force Participation," Journal of Human Resources, University of Wisconsin Press, vol. 24(3), pages 361-395.
  23. Anderson, Kathryn H. & Burkhauser, Richard V., 1984. "The importance of the measure of health in empirical estimates of the labor supply of older men," Economics Letters, Elsevier, vol. 16(3-4), pages 375-380.
  24. Kathleen McGarry, 2004. "Health and Retirement: Do Changes in Health Affect Retirement Expectations?," Journal of Human Resources, University of Wisconsin Press, vol. 39(3).
  25. Parsons, Donald O., 1996. "Imperfect 'tagging' in social insurance programs," Journal of Public Economics, Elsevier, vol. 62(1-2), pages 183-207, October.
  26. John Bound & Timothy Waidmann, 2002. "Accounting for Recent Declines in Employment Rates among Working-Aged Men and Women with Disabilities," Journal of Human Resources, University of Wisconsin Press, vol. 37(2), pages 231-250.
  27. Parsons, Donald O, 1984. "Disability Insurance and Male Labor Force Participation: A Response," Journal of Political Economy, University of Chicago Press, vol. 92(3), pages 542-49, June.
  28. Owen O'Donnell, 1998. "The Effect of Disability on Employment Allowing for Work Incapacity," Studies in Economics 9813, Department of Economics, University of Kent.
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