Title | Option Value and Dynamic Programming Model Estimates of Social Security Disability Insurance Application Timing |
Publication Type | Report |
Year of Publication | 2003 |
Authors | Burkhauser, RV, Butler, JS, Gumus, G |
Institution | Institute for the Study of Labor (IZA) |
City | Bonn, Germany |
Call Number | wp_2003/Burkhauser_etal_IZAdp941.pdf |
Keywords | disability insurance, Social Security |
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. |
Notes | RDA 1996-002 |
URL | https://www.iza.org/publications/dp/941/option-value-and-dynamic-programming-model-estimates-of-social-security-disability-insurance-application-timing |
Endnote Keywords | Social Security Disability Insurance |
Endnote ID | 13602 |
Citation Key | 5528 |