THE IMPACT OF WORK-LIMITING DISABILITY ON LABOR FORCE PARTICIPATION
Article first published online: 5 DEC 2013
Copyright © 2013 John Wiley & Sons, Ltd.
How to Cite
Webber, D. A. and Bjelland, M. J. (2013), THE IMPACT OF WORK-LIMITING DISABILITY ON LABOR FORCE PARTICIPATION. Health Econ.. doi: 10.1002/hec.3020
- Article first published online: 5 DEC 2013
- Manuscript Accepted: 8 NOV 2013
- Manuscript Revised: 2 OCT 2013
- Manuscript Received: 9 JUL 2012
- justification hypothesis
According to the justification hypothesis, non-employed individuals may over-report their level of work limitation, leading to biased census/survey estimates of the prevalence of severe disabilities and the associated labor force participation rate. For researchers studying policies which impact the disabled or elderly (e.g., Supplemental Security Income, Disability Insurance, and Early Retirement), this could lead to significant bias in key parameters of interest. Using the American Community Survey, we examine the potential for both inflated and deflated reported disability status and generate a general index of disability, which can be used to reduce the bias of these self-reports in other studies. We find that at least 4.8 million individuals have left the labor force because of a work-limiting disability, at least four times greater than the impact implied by our replication of previous models. Copyright © 2013 John Wiley & Sons, Ltd.