%0 Report
        %A Burkhauser, Richard V.
%A Butler, J. S.
%A Gumus, Gulcin
        %T Option Value and Dynamic Programming Model Estimates of Social Security Disability Insurance Application Timing
        %D 2003
        %8 2003 Nov
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 941
        %U https://www.iza.org/publications/dp941
        %X 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.
        %K option value
%K Health and Retirement Survey
%K Social Security Disability Insurance
%K dynamic programming