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|Title:||Option value and dynamic programming model estimates of social security disability insurance application timing |
|Authors:||Burkhauser, Richard V.|
Butler, J. S.
|Issue Date:||2003 |
|Series/Report no.:||IZA Discussion paper series 941|
|Abstract:||This paper develops dynamic structural models - an option value model and a dynamic programming model - of the Social Security Disability Insurance (SSDI) application timing decision. We estimate the time to application from the point at which a health condition first begins to affect the kind or amount of work that a currently employed person can do. We use Health and Retirement Study (HRS) and restricted access Social Security earnings data for estimation. Based on tests of both in-sample and out-of-sample predictive accuracy, our option value model performs better than both our dynamic programming model and our reduced form hazard model.|
|Subjects:||Social Security Disability Insurance|
Health and Retirement Survey
|Document Type:||Working Paper|
|Appears in Collections:||IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)|
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