The Heterogeneous Value of a Statistical Life: Evidence from U.S. Army Reenlistment Decisions
75 Pages Posted: 7 Jul 2021 Last revised: 30 Sep 2021
Date Written: September 29, 2021
We estimate the value of a statistical life (VSL), or the willingness to trade-off wealth and mortality risk, among 430,000 U.S. Army soldiers choosing whether to reenlist from 2002-2010. Using a discrete choice random utility approach and significant variation in retention bonuses and mortality risk, we recover average VSL estimates between $500,000 and $900,000, an order of magnitude smaller than U.S. civilian labor market estimates. We then document substantial heterogeneity by recovering indifference curves between wealth and mortality risk. The VSL increases with mortality risk within type, and soldiers in combat occupations have lower VSLs than those in noncombat occupations.
Keywords: Value of Life, Forgone Income, Wage Level and Structure, Wage Differentials, Public Sector Labor Markets
JEL Classification: J17, J31, J45
Suggested Citation: Suggested Citation