Imperfect Tagging Revisited
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.
|Date of creation:||19 Feb 2007|
|Date of revision:|
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- Sheshinski, E. & Diamond, P., 1992.
"Economic Aspects of Optimal Disability Benefits,"
92-5, Massachusetts Institute of Technology (MIT), Department of Economics.
- Parsons, Donald O., 1996. "Imperfect 'tagging' in social insurance programs," Journal of Public Economics, Elsevier, vol. 62(1-2), pages 183-207, October.
- Hugo Benitez-Silva & Moshe Buchinsky & John Rust, 2005.
"How Large are the Classification Errors in the Social Security Disability Award Process?,"
Department of Economics Working Papers
05-02, Stony Brook University, Department of Economics.
- 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.
- 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.
- P. A. Diamond & J. A. Mirrlees, 1977. "A Model of Social Insurance With Variable Retirement," Working papers 210, Massachusetts Institute of Technology (MIT), Department of Economics.
- Salanie, Bernard, 2002. "Optimal demogrants with imperfect tagging," Economics Letters, Elsevier, vol. 75(3), pages 319-324, May.
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