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Recent Scientific Accomplishments Rust and coauthors Moshe Buchinsky of Brown University and Hugo Benitez-Silva, of SUNY–Stony Brook have investigated the reliability of self-reported measures of disability among the elderly in survey data. There is a concern that self-reported health and disabilities are biased and endogenous. A commonly suggested mechanism is that survey respondents exaggerate the severity of health problems and the incidence of disabilities in order to rationalize labor force non-participation, application for disability benefits and/or receipt of those benefits. In a 2004 paper published in the Journal of Applied Econometrics, the authors re-examined this issue using a self-reported indicator of disability status from the Health and Retirement Survey (HRS). The authors results indicate that disability applicants do not exaggerate their disability status at least in anonymous surveys such as the HRS. Their results were consistent with the hypothesis that disability applicants are aware of the criteria and decision rules that SSA uses in making awards and act as if they were applying these same criteria and rules when reporting their own disability status. In another line of recent research, Rust examines the impact of retiree health insurance coverage on retirement decisions, by looking at university faculty work and retirement decisions. The argument is that the risk of uninsured health care costs is a major consideration affecting faculty decisions. This work simulates the elimination of retiree health insurance as a benefit, and shows that cutting back on this benefit could potentially increase rather than save total costs of compensation, as the policy would induce faculty to delay retirement. The results show that it may be better for employers to provide a combination package, for instance to continue retiree health insurance until Medicare eligibility age, which would be less costly than the policy of providing retiree health insurance regardless of age, or eliminating health insurance after retirement completely. The work appeared as part of the 2005 publication Recruitment, Retention and Retirement: the Three Rs of Higher Education in the 21st Century. Rust’s current research, funded by NIA/NIH, examines the economic and health determinants of retirement behavior. Using all available waves of the Health and Retirement Survey (HRS) the study estimates a comprehensive dynamic programming model of behavior at the end of the life cycle. In 2005, Rust completed an NIA funded study in conjunction with the University of Michigan, on the impact of health insurance on retirement. The study generated an empirical model that evaluates the welfare costs of lack of access to fairly priced health insurance, and the effect of government provided health insurance on retirement decisions and disability application and return to work decisions. Rust also received funding from NSF for three projects, on efficiency of social insurance, optimal models of natural resources extraction, and for models of bargaining and price determination. Rust intends to continue his research on the design of efficient social insurance institutions (social security, disability insurance, Medicare), incorporating theoretical elements, as well as his research aimed at narrowing the gaps in health insurance coverage among sub-groups of the population. | ||||||||
Maryland Population Research Center
0124N Cole Student Activities Building (#162)
College Park, MD 20742
Phone: 301-405-6403
Fax: 301-405-5743