ECONOMIC WELL BEING AND EMPLOYMENT BEHAVIOR FOLLOWING ONSET OF A DISABILITY

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The explosive growth in the disability benefit rolls between 1989 and 1993, coupled with the recognition that many people with disabilities work and that those who do are better off than those who depend on transfers, has heightened interest in the factors that influence an individual's work and economic well-being following the onset of a disability. Despite this heightened interest, to date only a small body of research has focused on this topic. This proposal will describe the various paths that individuals with disabilities take following the onset of a health condition and investigate the factors that influence these decisions. These goals will be accomplished by applying a broad definition of disability unrelated to post-onset behaviors such as reduced work or benefit receipt; by using this definition to describe the entire distribution of outcomes for people with disabilities, not just the experiences of the average member of the population; by expanding the analysis to multi-period data to capture the critical transition years before and after the onset of a disability; by comparing the outcomes for individuals with disabilities in the United States with outcomes for their counterparts in Germany; by modeling the decision to apply for the single most important United States disability transfer program-Social Security Disability Insurance (DI); and by simulating the consequences of changes in disability policy using the results of these structural models.