Incidence of Reported Disability among Men: Accounting for Self Selection

A large volume of research has investigated consequences of physical and health impairments with respect to labor force attachments and earnings of persons with disabilities. Many of these studies are based on data sources in which individual disability status is self-reported. Considerably less attention has been devoted to factors that determine self-reported disability. The contribution of this paper is in its distinction between two aspects of endogenous selection in the transition from self-declared nondisability to disability status. On one hand, measured earnings and income might exert a direct effect on the individual’s propensity to report disability. On the other hand, some individuals possess unmeasured traits that might simultaneously affect their earnings and their propensity to report a disability. Based on samples of individuals from the U.S. Current Population Survey at two points in time, and using individuals who initially do not report a disability, this study looks for an explicit role of earnings per se in the reporting decision. Second, it examines whether transitions to disability between the two periods occur in the presence of correlation between unmeasured factors present in both earnings during the first period and the subsequent decision to report a disability.