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How large is the bias in self-reported disability?

  • Hugo Benítez-Silva

    (Stony Brook University, State University of New York, USA)

  • Moshe Buchinsky

    (University of California, Los Angeles, USA, National Bureau of Economic Research, USA and CREST-INSEE, France)

  • Hiu Man Chan

    (Charles River Associates, Boston, USA)

  • Sofia Cheidvasser

    (Goldman Sachs, New York, USA)

  • John Rust

    (University of Maryland, USA, and National Bureau of Economic Research, USA)

A pervasive concern with the use of self-reported health measures in behavioural models is that individuals tend to exaggerate the severity of health problems in order to rationalize their decisions regarding labour force participation, application for disability benefits, etc. We re-examine this issue using a self-reported indicator of disability status from the Health and Retirement Study. We study a subsample of individuals who applied for disability benefits from the Social Security Administration (SSA), for whom we can also observe the SSA's decision. Using a battery of tests, we are unable to reject the hypothesis that self-reported disability is an unbiased indicator of the SSA's decision. Copyright © 2004 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/jae.797
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File URL: http://qed.econ.queensu.ca:80/jae/2004-v19.6/
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Article provided by John Wiley & Sons, Ltd. in its journal Journal of Applied Econometrics.

Volume (Year): 19 (2004)
Issue (Month): 6 ()
Pages: 649-670

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Handle: RePEc:jae:japmet:v:19:y:2004:i:6:p:649-670
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  1. Bierens, Herman J, 1990. "A Consistent Conditional Moment Test of Functional Form," Econometrica, Econometric Society, vol. 58(6), pages 1443-58, November.
  2. John Bound & Michael Schoenbaum & Todd R. Stinebrickner & Timothy Waidmann, 1998. "The Dynamic Effects of Health on the Labor Force Transitions of Older Workers," NBER Working Papers 6777, National Bureau of Economic Research, Inc.
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  7. John Bound, 1989. "The Health and Earnings of Rejected Disability Insurance Applicants," NBER Working Papers 2816, National Bureau of Economic Research, Inc.
  8. Hugo Benitez-Silva & Moshe Buchinsky & Hiu-Man Chan & John Rust & Sofia Sheivasser, 1997. "An Empirical Analysis of the Social Security Disability Application, Appeal, and Award Process," Public Economics 9712001, EconWPA, revised 16 Feb 1998.
  9. 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.
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  11. James J. Heckman, 1977. "Dummy Endogenous Variables in a Simultaneous Equation System," NBER Working Papers 0177, National Bureau of Economic Research, Inc.
  12. John Rust & Christopher Phelan, 1994. "How Social Security and Medicare Affect Retirement Behavior in a World of Incomplete Markets," Public Economics 9406005, EconWPA, revised 06 Jul 1994.
  13. Hugo Benítez-Silva & Moshe Buchinsky & Hiu Man Chan & Sofia Cheidvasser & John Rust, 2004. "How large is the bias in self-reported disability?," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 19(6), pages 649-670.
  14. Jianting Hu & Kajal Lahiri & Denton R. Vaughan & Bernard Wixon, 2001. "A Structural Model Of Social Security'S Disability Determination Process," The Review of Economics and Statistics, MIT Press, vol. 83(2), pages 348-361, May.
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  17. Kerkhofs, Marcel & Lindeboom, Maarten & Theeuwes, Jules, 1999. "Retirement, financial incentives and health," Labour Economics, Elsevier, vol. 6(2), pages 203-227, June.
  18. 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.
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  20. Horowitz, Joel L. & Spokoiny, Vladimir G., 1999. "An Adaptive, Rate-Optimal Test of a Parametric Model Against a Nonparametric Alternative," Working Papers 99-02, University of Iowa, Department of Economics.
  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. Kenneth L. Judd, 1998. "Numerical Methods in Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262100711.
  23. Horowitz, Joel L. & Spokoiny, Vladimir G., 1999. "An adaptive, rate-optimal test of a parametric model against a nonparametric alternative," SFB 373 Discussion Papers 1999,10, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
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