@article {5528, title = {Option Value and Dynamic Programming Model Estimates of Social Security Disability Insurance Application Timing}, year = {2003}, note = {RDA 1996-002}, institution = {Institute for the Study of Labor (IZA)}, address = {Bonn, Germany}, 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.}, keywords = {disability insurance, Social Security}, url = {https://www.iza.org/publications/dp/941/option-value-and-dynamic-programming-model-estimates-of-social-security-disability-insurance-application-timing}, author = {R.V. Burkhauser and Butler, J.S. and Gumus, Gulcin} }