DP1559 Applications to the US Disability Program: A Semiparametric Approach

Author(s): Brent Kreider, Regina Riphahn
Publication Date: January 1997
Keyword(s): Disability System, Discrete Factor Approximation, Retirement Behaviour, Social Security
JEL(s): H55, J26
Programme Areas: Human Resources
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=1559

This study investigates the determinants of applications for US disability benefits between 1986 and 1993 using a semiparametric discrete factor procedure. Approximating a dynamic optimization model, the estimation carefully accounts for a variety of potential biases that weren?t addressed in previous studies. Our results indicate vast differences in the responses of men and women to variations in policy measures. Past labour earnings and fringe benefits as well as benefit eligibility and benefit amounts clearly affect application behaviour.