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The Benefits to Taxpayers from Increases in Students - RAND ...

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Social Program Participation and Costs 107<br />

Unemployment Insurance<br />

We estimate <strong>in</strong>come <strong>from</strong> the Unemployment Insurance program us<strong>in</strong>g the two-part<br />

model. <strong>The</strong> first part of the model estimates the likelihood of utiliz<strong>in</strong>g Unemployment<br />

Insurance with probit, and the second part estimates the amount of unemployment<br />

compensation received <strong>in</strong> the year conditional on utilization with OLS. <strong>The</strong> response<br />

variable <strong>in</strong> the <strong>in</strong>come regression is logged compensation for normality. Results are<br />

presented <strong>in</strong> Table C.7.<br />

Social Security<br />

We estimate <strong>in</strong>come <strong>from</strong> the Social Security program us<strong>in</strong>g a two-part model. <strong>The</strong><br />

first part of the model estimates the likelihood of Social Security utilization with<br />

probit, and the second part estimates the amount of Social Security <strong>in</strong>come received<br />

<strong>in</strong> the year conditional on utilization with OLS. <strong>The</strong> response variable <strong>in</strong> the <strong>in</strong>come<br />

regression is the square root of Social Security <strong>in</strong>come for normality.<br />

Further, like SSI, the Social Security program <strong>in</strong>cludes a retirement benefits subprogram<br />

that can kick <strong>in</strong> start<strong>in</strong>g age 62, and survivor and disability <strong>in</strong>surance programs<br />

that might be applicable regardless of age. <strong>The</strong>refore, we modeled program utilization<br />

and <strong>in</strong>come separately for the elderly and non-elderly, us<strong>in</strong>g 62 as the transition<br />

age (the actual age profile of users <strong>in</strong> the SIPP confirms this). Results are presented <strong>in</strong><br />

Table C.8a for utilization and C.8b for <strong>in</strong>come.

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