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How Large is the BIas in Self-Reported Disability Status?

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  • Hugo Benitez-Silva

    ()

  • Moshe Buchinsky
  • Hiu-Man Chan
  • Sofia Cheidvasser
  • John Rust

Abstract

A pervasive concern with the use of self-reported health and disability measures in behavioral models is that they are biased and endogenous. A commonly suggested explanation is that survey respondents exaggerate the severity of health problems and incidence of disabilities in order to rationalize labor force non-participation, application for disability benefits and/or receipt of those benefits. This paper re-examines this issue using a self-reported indicator of disability status from the Health and Retirement Survey. Using a bivariate probit model we test and are unable to reject the hypothesis that the self-reported disability measure is an exogenous explanatory variable in a model of individual's decision to apply for DI benefits or Social Security Administration's decision to award benefits. We further study a subsample of individuals who applied for Disability Insurance and Supplemental Security Income benefits from the Social Security Administration (SSA) for whom we can also observe SSA's award/deny decision. For this subsample we test and are unable to reject the hypothesis that self-reported disability is health and socio-economic characteristics similar to the information used by the SSA in making its award decisions. The unbiasedness restriction implies that these two variables have the same conditional probability distributions. Thus, our results indicate that disability applicant do not exaggerate their disability status at least in anonymous surveys such as the HRS. Indeed, our results are consistent with the hypothesis that disability applicants are aware of the criteria and decision rules that SSA uses in making awards and act as if they were applying these same criteria and rules when reporting their own disability status.

Suggested Citation

  • Hugo Benitez-Silva & Moshe Buchinsky & Hiu-Man Chan & Sofia Cheidvasser & John Rust, 1999. "How Large is the BIas in Self-Reported Disability Status?," Department of Economics Working Papers 99-02, Stony Brook University, Department of Economics.
  • Handle: RePEc:nys:sunysb:99-02
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    File URL: http://www.stonybrook.edu/commcms/economics/research/papers/1999/99-02.pdf
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    Cited by:

    1. Hugo Benitez-Silva & Sofia Sheidvasser, 2000. "The Educated Russian's Curse: Returns to Education in the Russian Federation," Department of Economics Working Papers 00-05, Stony Brook University, Department of Economics.
    2. Teresa Bago d’Uva & Maarten Lindeboom & Owen O’Donnell & Eddy van Doorslaer, 2011. "Slipping Anchor?: Testing the Vignettes Approach to Identification and Correction of Reporting Heterogeneity," Journal of Human Resources, University of Wisconsin Press, vol. 46(4), pages 875-906.

    More about this item

    Keywords

    Social Security; Disability; Health and Retirement Survey; Conditional Moment Tests;

    JEL classification:

    • H5 - Public Economics - - National Government Expenditures and Related Policies

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