TY  - RPRT
        AU  - Burkhauser, Richard V.
AU  - Butler, J. S.
AU  - Gumus, Gulcin
        TI  - Option Value and Dynamic Programming Model Estimates of Social Security Disability Insurance Application Timing
        PY  - 2003/Nov/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 941
        UR  - https://www.iza.org/index.php/publications/dp941
        AB  - 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.
        KW  - option value
KW  - Health and Retirement Survey
KW  - Social Security Disability Insurance
KW  - dynamic programming
        ER  -