Age Variations in Workers' Value of Statistical Life

Joseph E. Aldy () and W Kip Viscusi

No 10199, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper develops a life-cycle model in which workers choose both consumption levels and job fatality risks, implying that the effect of age on the value of life is ambiguous. The empirical analysis of this relationship uses novel, age-dependent fatal and nonfatal risk variables. Workers' value of statistical life exhibits an inverted U-shaped relationship over workers' life cycle based on hedonic wage model estimates, age-specific hedonic wage estimates, and a minimum distance estimator. The value of statistical life for a 60-year old ranges from $2.5 million to $3.0 million -- less than half the value for 30 to 40-year olds.

JEL-codes: J17 I12 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-edu, nep-hea and nep-rmg
Date: 2004-01
Note: HE LS LE
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