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Bounding the Joint Distribution of Disability and Employment with Contaminated Data

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  • Liu, Ding

    (Southern Methodist University)

  • Millimet, Daniel L.

    (Southern Methodist University)

Abstract

Understanding the relationship between disability and employment is critical and has long been the subject of study. However, estimating this relationship is difficult, particularly with survey data, since both disability and employment status are known to be misreported. Here, we use a partial identification approach to bound the joint distribution of disability and employment status in the presence of contaminated data. Allowing for a modest amount of contamination leads to bounds on the labor market status of the disabled that are not overly informative given the relative size of the disabled population. Thus, absent further assumptions, even a modest amount of contamination creates much uncertainty about the employment gap between the non-disabled and disabled. However, additional assumptions considered are shown to have some identifying power. For example, under our most stringent assumptions, we find that the employment gap is at least 15.2% before the Great Recession and 22.0% afterwards.

Suggested Citation

  • Liu, Ding & Millimet, Daniel L., 2020. "Bounding the Joint Distribution of Disability and Employment with Contaminated Data," IZA Discussion Papers 13020, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp13020
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    References listed on IDEAS

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    More about this item

    Keywords

    measurement error; disability; employment; partial identification;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C18 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Methodolical Issues: General
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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