The influence of economic incentives on reported disability status

Gannon, Brenda (2009) The influence of economic incentives on reported disability status. Health Economics, 18 7: 743-759. doi:10.1002/hec.1399

Author Gannon, Brenda
Title The influence of economic incentives on reported disability status
Journal name Health Economics   Check publisher's open access policy
ISSN 1057-9230
Publication date 2009-07-01
Year available 2009
Sub-type Article (original research)
DOI 10.1002/hec.1399
Open Access Status Not yet assessed
Volume 18
Issue 7
Start page 743
End page 759
Total pages 17
Place of publication Chichester, West Sussex United Kingdom
Publisher John Wiley & Sons
Language eng
Abstract Self-reported disability status is often relied upon in labour force participation models, but this may be reported with error for economic or psychological reasons and can lead to a bias in the effect of disability on participation. In this paper, we explore the possibility that reported limitations in daily activities are mis-reported, in particular for those who define their labour force status as disabled/ill, and assess if economic incentives influence this group to mis-report. The main questions we wish to address therefore are: (1) was there state-dependent reporting error and did economic incentives play a role, and (2) did this change over the years 1995–2001? Using a generalised ordered response model, we compute cleansed measures of disability that correspond to predicted responses individuals would have made if employed. Unobserved differences between the employed and non-employed may exist; therefore, we control for this via correlated random effects. The results indicate that the disabled/ill group did over-report and the difference between actual and predicted probabilities only marginally changed between 1995 and 2001. The extent of this measurement error is lower once we control for unobserved heterogeneity.
Keyword Economic incentives
Panel generalised ordered response model
Reported disability
Unobserved heterogeneity
Q-Index Code C1
Q-Index Status Provisional Code
Institutional Status Non-UQ

Document type: Journal Article
Sub-type: Article (original research)
Collections: Faculty of Business, Economics and Law -- Publications
Faculty of Health and Behavioural Sciences -- Publications
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Citation counts: TR Web of Science Citation Count  Cited 5 times in Thomson Reuters Web of Science Article | Citations
Scopus Citation Count Cited 7 times in Scopus Article | Citations
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Created: Thu, 23 Feb 2017, 09:30:58 EST by Anthony Yeates on behalf of Faculty of Business, Economics & Law