Dynamic Modeling of the Ssdi Application Timing Decision: The Importance of Policy Variables

52 Pages Posted: 12 Dec 2003

See all articles by Richard V. Burkhauser

Richard V. Burkhauser

Cornell University - Department of Policy Analysis & Management (PAM); University of Melbourne, Melbourne Institute

J.S. Butler

Syracuse University - Department of Economics; University of Kentucky

Gulcin Gumus

Florida International University (FIU); IZA Institute of Labor Economics

Date Written: November 2003

Abstract

This paper analyzes the importance of policy variables in the context of Social Security Disability Insurance (SSDI) application timing decision. Previously, we explicitly modeled the optimal timing of SSDI application using dynamic structural models. We estimated these models using data from the Health and Retirement Study (HRS). This paper uses option value model estimates to simulate application timing under alternative SSDI policy formulations. We consider changes in three policy variables: benefit levels, acceptance rates, and employer accommodation. Our simulations suggest all these changes would have substantial effects on expected spell lengths until application and on lifetime application rates, and hence on SSDI caseloads.

Keywords: Social Security Disability Insurance, Health and Retirement Survey, option value

JEL Classification: H31, H55

Suggested Citation

Burkhauser, Richard V. and Butler, J.S. and Gumus, Gulcin, Dynamic Modeling of the Ssdi Application Timing Decision: The Importance of Policy Variables (November 2003). IZA Discussion Paper No. 942. Available at SSRN: https://ssrn.com/abstract=475041

Richard V. Burkhauser

Cornell University - Department of Policy Analysis & Management (PAM) ( email )

120 Martha Van Rensselaer Hall
Ithaca, NY 14853
United States

University of Melbourne, Melbourne Institute ( email )

Level 5, FBE Building, 111 Barry Street
161 Barry Street
Carlton, VIC 3053
Australia

J.S. Butler

Syracuse University - Department of Economics ( email )

Syracuse, NY 13244-1020
United States
315-443-4589 (Phone)
315-443-1081 (Fax)

University of Kentucky ( email )

Lexington, KY 40546
United States

Gulcin Gumus (Contact Author)

Florida International University (FIU) ( email )

University Park
11200 SW 8th Street
Miami, FL 33199
United States

IZA Institute of Labor Economics ( email )

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

Register to save articles to
your library

Register

Paper statistics

Downloads
88
Abstract Views
1,102
rank
294,372
PlumX Metrics