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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
DOI: 10.1002/jae.797
Contact details of provider: Web page: http://www.interscience.wiley.com/jpages/0883-7252/

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  1. 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.
  2. 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.
  3. Halpern, Janice & Hausman, Jerry A., 1986. "Choice under uncertainty: A model of applications for the social security disability insurance program," Journal of Public Economics, Elsevier, vol. 31(2), pages 131-161, November.
  4. Dwyer, Debra Sabatini & Mitchell, Olivia S., 1999. "Health problems as determinants of retirement: Are self-rated measures endogenous?," Journal of Health Economics, Elsevier, vol. 18(2), pages 173-193, April.
  5. Bound, John, 1989. "The Health and Earnings of Rejected Disability Insurance Applicants," American Economic Review, American Economic Association, vol. 79(3), pages 482-503, June.
  6. Robert Haveman & Philip de Jong & Barbara Wolfe, 1991. "Disability Transfers and the Work Decision of Older Men," The Quarterly Journal of Economics, Oxford University Press, vol. 106(3), pages 939-949.
  7. Kerkhofs, Marcel & Lindeboom, Maarten & Theeuwes, Jules, 1999. "Retirement, financial incentives and health," Labour Economics, Elsevier, vol. 6(2), pages 203-227, June.
  8. Rust, J., 1994. "How Social Security and Medicare Affect Retirement Behavior in a World of Incomplete Markets," Working papers 9430, Wisconsin Madison - Social Systems.
  9. Rust, J., 1994. "Using Randomization to Break the Curse of Dimensionality," Working papers 9429, Wisconsin Madison - Social Systems.
  10. 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.
  11. Donald W. K. Andrews & Moshe Buchinsky, 2000. "A Three-Step Method for Choosing the Number of Bootstrap Repetitions," Econometrica, Econometric Society, vol. 68(1), pages 23-52, January.
  12. Richard V. Burkhauser & Robert H. Haveman & Barbara L. Wolfe, 1993. "How people with disabilities fare when public policies change," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 12(2), pages 251-269.
  13. 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.
  14. 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.
  15. 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.
  16. 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.
  17. 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.
  18. 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.
  19. Bierens, H.J., 1989. "A consistent conditional moment test of functional form," Serie Research Memoranda 0064, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
  20. James J. Heckman, 1977. "Dummy Endogenous Variables in a Simultaneous Equation System," NBER Working Papers 0177, National Bureau of Economic Research, Inc.
  21. Kenneth L. Judd, 1998. "Numerical Methods in Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262100711, March.
  22. John Bound & Michael Schoenbaum & Timothy Waidmann, 1995. "Race and Education Differences in Disability Status and Labor Force Attachment," NBER Working Papers 5159, National Bureau of Economic Research, Inc.
  23. 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.
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