Title

Essays in applied microeconometrics

Date of Award

1999

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Economics

Advisor(s)

Richard V. Burkhauser

Keywords

Microeconometrics, Disability, Social Security Disability Insurance, Hazard model

Subject Categories

Economics | Labor Economics

Abstract

This dissertation consists of three essays in applied microeconometrics. In the first essay, I use retrospective data from the Health and Retirement Study (HRS) together with matching state level data on SSDI allowance rates and individual level Social Security administrative record data on the generosity of SSDI benefits to examine how the Social Security Disability Insurance program affects a person's work behavior following the onset of a disability. A hazard model that allows for both measured and unmeasured heterogeneity is used to estimate the relative importance of policy variables--employer accommodation as well as the relative value and likelihood of acceptance onto the SSDI program--on the timing of SSDI application following the onset of a disability. The results show that employer accommodation significantly slows a worker's application for SSDI benefits while easier access to SSDI benefits and more generous SSDI benefits increase the speed of application following the onset of a health condition.

In the second essay, I develop three approaches that may be used to obtain consistent estimates of the structural parameters in the fixed effects ordered logit model. The first approach uses the adjacent categories form of the ordered logit along with the conditional logit and minimum distance estimator to obtain estimates of the structural parameters. In a second step, the Generalized Method of Moments (GMM) is used to estimate the sum of the limit parameters and the fixed effects, and finally the limits are estimated based on the means of the sums. The other approaches interpret fixed effects as random effects. The second approach specifies the fixed effects as omitted variables that raise the variance of the disturbance and bias the logit estimates. A generated regressor is created to allow the bias to be corrected. The third approach generalizes a new method of estimation for the fixed effects logit model to the ordered logit. Specification tests are extended to these estimators and a Monte Carlo experiment is constructed to test the small sample properties of the estimator.

The third essay uses data from the Panel Study of Income Dynamics (PSID) to examine how experience with entrepreneurship--defined as persons who are self-employed--has affected an individual's place in the earnings distribution. The strategy is to follow individuals' positions in the income distribution over time, and to see how their mobility was affected by involvement with entrepreneurship. The results show that for low-income individuals there is some merit to the notion that the self-employed moved ahead in the earnings distribution relative to those who remained wage earners. On the other hand, for those at the upper end of the earnings distribution, those who became self-employed often advanced less in the earnings distribution than their wage and salary counterparts.

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