A Structural Model of Social Security’s Disability Determination Process

We estimate a multi-stage sequential logit model reflecting the structure of the disability determination process of the Social Security Administration (SSA). The model is estimated using household survey information exact-matched to SSA records on disability adjudications from 1989 to 1993. Under program provisions, different criteria dictate outcomes at different steps of the determination process. We find that without the multistaged structural approach, effects of many important health, disability, and vocational factors are not readily discernible. As a result, split-sample predictions of overall allowance rates from the sequential model perform considerably better than those for the conventional allowed/denied logit regression.