Dynamic Modeling of the SSDI Application Timing Decision:
The Importance of Policy Variables
Richard
V. Burkhauser, J. S. Butler and Gulcin Gumus
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.
Published in: (IZA), 2003, Discussion Paper No. 942.
For full text see publisher’s website:
ftp://repec.iza.org/RePEc/Discussionpaper/dp942.pdf
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