Disability Status as an Unobservable: Estimates from a Structural Model

55 Pages Posted: 27 Apr 2000 Last revised: 28 Sep 2010

See all articles by Robert Haveman

Robert Haveman

University of Wisconsin - Madison - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute)

Fung Mey Huang

Academia Sinica; National Bureau of Economic Research (NBER)

Barbara Wolfe

University of Wisconsin-Madison; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute); RSSS-economics; National Bureau of Economic Research (NBER)

Date Written: 1989

Abstract

We propose an index of "true disability" by treating disability status as an unobservable phenomenon which is both causally related to a number of exogenous characteristics of an individual and correlated with a number of observed indicators of health, impairment and qualifications for employment. First, we define true disability and distinguish it from related concepts. We then discuss the importance of an objective and reliable measure of disability for research on the determinants of behavior. Next, we present the specification of our structural model for estimating true disability as a latent variable. Finally, we report the results of our estimation in a simple model of Labor force participation, and compare the effect of using the constructed index and a self-reported disability measure on understanding the determinants of behavior and choice.

Suggested Citation

Haveman, Robert H. and Huang, Fung Mey and Wolfe, Barbara L., Disability Status as an Unobservable: Estimates from a Structural Model (1989). NBER Working Paper No. w2831. Available at SSRN: https://ssrn.com/abstract=227238

Robert H. Haveman (Contact Author)

University of Wisconsin - Madison - Department of Economics ( email )

1180 Observatory Drive
Madison, WI 53706
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608-263-7398 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
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IZA Institute of Labor Economics

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Germany

CESifo (Center for Economic Studies and Ifo Institute)

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Germany

Fung Mey Huang

Academia Sinica

Nankang
Taipei, 11529
Taiwan

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

Barbara L. Wolfe

University of Wisconsin-Madison ( email )

Social Science Bldg
Madison, WI 53706
United States
6082626358 (Phone)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

RSSS-economics ( email )

Canberra, Australian Capital Territory 2601
Australia

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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