How Large is the Stock Component of Human Capital?

49 Pages Posted: 8 Jun 2015

See all articles by Mark Huggett

Mark Huggett

Georgetown University - Department of Economics

Greg Kaplan

Princeton University - Department of Economics

Date Written: June 2015

Abstract

This paper examines the value of an individual’s human capital and the associated return on human capital using U.S. data on male earnings and financial asset returns. We find that (1) the value of human capital is far below the value implied by discounting earnings at the risk-free rate and (2) the stock component of the value of human capital is smaller than the bond component at all ages. The stock component averages less than 35 percent of the value of human capital at each age.

Suggested Citation

Huggett, Mark and Kaplan, Greg, How Large is the Stock Component of Human Capital? (June 2015). NBER Working Paper No. w21238. Available at SSRN: https://ssrn.com/abstract=2615644

Mark Huggett (Contact Author)

Georgetown University - Department of Economics ( email )

Washington, DC 20057
United States
202-687-6683 (Phone)

Greg Kaplan

Princeton University - Department of Economics ( email )

Princeton, NJ 08544-1021
United States

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