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Imperfect Tagging Revisited

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  • Rehn, Eric

    (Department of Economics, Lund University)

Abstract

Revisiting Parsons' 1996 article about disability insurance with imperfect tagging in a two type-economy -- individuals are either able or disabled. Here Parsons' analysis is extended in several directions. The model is generalized to allow for different utility functions over work status. The analysis extends to three different cases of a two-type economy. Finally Parsons' model is extended to three types: able, partially disabled and disabled - adapting the model to disability insurances allowing for more than two degrees of disability. The results are consistent with Parsons', but a complete ranking of the consumption allocations cannot be achieved in the general case.

Suggested Citation

  • Rehn, Eric, 2007. "Imperfect Tagging Revisited," Working Papers 2007:2, Lund University, Department of Economics.
    • Handle: RePEc:hhs:lunewp:2007_002
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    File URL: http://project.nek.lu.se/publications/workpap/Papers/WP07_2.pdf
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    References listed on IDEAS

    as
    1. Salanie, Bernard, 2002. "Optimal demogrants with imperfect tagging," Economics Letters, Elsevier, vol. 75(3), pages 319-324, May.
    2. Hugo Benitez-Silva & Moshe Buchinsky & John Rust, 2004. "How Large are the Classification Errors in the Social Security Disability Award Process?," NBER Working Papers 10219, National Bureau of Economic Research, Inc.
    3. Diamond, P. A. & Mirrlees, J. A., 1978. "A model of social insurance with variable retirement," Journal of Public Economics, Elsevier, vol. 10(3), pages 295-336, December.
    4. Diamond, Peter & Sheshinski, Eytan, 1995. "Economic aspects of optimal disability benefits," Journal of Public Economics, Elsevier, vol. 57(1), pages 1-23, May.
    5. Parsons, Donald O., 1996. "Imperfect 'tagging' in social insurance programs," Journal of Public Economics, Elsevier, vol. 62(1-2), pages 183-207, October.
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    More about this item

    Keywords

    social insurance; imperfect tagging; partial disability;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs

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