TY  - JOUR
AU  - Halpern,Janice
AU  - Hausman,Jerry A.
TI  - Choice Under Uncertainty:  A Model of Applications for the Social Security Disability Insurance Program
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 1690
PY  - 1985
Y2  - August 1985
UR  - http://www.nber.org/papers/w1690
L1  - http://www.nber.org/papers/w1690.pdf
N1  - Author contact info:
Jerry A. Hausman
Department of Economics
MIT, Room E52-271A
50 Memorial Drive
Cambridge, MA  02139
Tel: 617/253-3644
Fax: 617/253-1330
E-Mail: jhausman@mit.edu
M2  - featured in NBER digest on 1985-12-01
AB  - Not all people with health problems are disabled. Some individuals with severe physical or mental impairments, such as blindness or limb amputation, continue to hold jobs and generally function satisfactorily.They constitute, however, a group of potentially disabled individuals who might apply and qualify for Disability Insurance or other disability-related benefits if they were to lose their jobs or to decide that employment offered an inadequate financial or non-pecuniary reward. Thus, disability, or a health-related inability to work, is more than a medical problem but involves motivational and attitudinal factors. We specify a model of the application process, which we model as choice under uncertainty about approval of an application for Disability Insurance. We specify the possible outcomes to the choice process of an individual in which the probability of acceptance for Disability Insurance is a key consideration. We then estimate a joint model of labor supply and application to the Disability Insurance program based on the 1972 survey. We then compare our results to the observed time series applications process since 1976. Lastly, we estimate the sensitivity of the application process to the probability of acceptance and the level of benefits.
ER  -