Resources for the Future Discussion Paper No. 06-12
35 Pages Posted: 2 Mar 2006
Date Written: February 2006
This article develops the first measures of age-industry job risks to examine the age variations in the value of statistical life. Because of the greater risk vulnerability of older workers, they face flatter wage-risk gradients than younger workers, which we show to be the case empirically. Accounting for this heterogeneity in hedonic market equilibria leads to estimates of the value of statistical life-age relationship that follows an inverted-U shape. The estimates of the value of statistical life range from $6.4 million for younger workers to a peak of $9.0 million for those age 35-44, and then a decline to $3.7 million for those age 55-62. The decline of the estimated VSL with age is consistent with there being some senior discount in the Clear Skies Initiative analysis.
Keywords: value of statistical life, job risks, senior discount, compensating differentials
JEL Classification: J17, I12
Suggested Citation: Suggested Citation
Viscusi, W. Kip and Aldy, Joseph E., Labor Market Estimates of the Senior Discount for the Value of Statistical Life (February 2006). Resources for the Future Discussion Paper No. 06-12. Available at SSRN: https://ssrn.com/abstract=887180 or http://dx.doi.org/10.2139/ssrn.887180