Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/20178
Authors: 
Burkhauser, Richard V.
Butler, J. S.
Gumus, Gulcin
Year of Publication: 
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
option value
dynamic programming
JEL: 
H55
H31
Document Type: 
Working Paper

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