Fig. 3.
Worker policies for job search and SSDI application, by likelihood of receiving SSDI benefits upon application (p) and job finding probability (f). See the text for description of model. Other model parameters are VE = 1/(1 − δ) (corresponding to a per-period wage normalized to 1 and a job that lasts forever); bUI = 0.4; bDI = 0.5; cU = 0.2; cA = 3; δ = 0.95; and u(y) = y.