Activity limitations and work limitations are often used interchangeably to proxy work disability. The findings of this article show that both definitions produce very similar estimates of disability effect on labour force participation if a two-step model is used to address the endogeneity of...

By estimating a simultaneous equation model on panel data, this study examines whether self-reported disability status is endogenous to labour force status. While for males the exogeneity of disability status cannot be rejected, it is rejected for females. However, for both males and females the...

Three methods can be used to estimate simultaneous equation models with latent dependent variables: two-stage, minimum distance (MD) and full-information maximum likelihood. Theoretically all the three methods provide asymptotically consistent estimates, but the performance of these estimators...