Labor Market Estimates of the Senior Discount for the Value of Statistical Life

W Kip Viscusi and Joseph E. Aldy ()

Discussion Papers from Resources For the Future

Abstract: 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 (search for similar items in EconPapers)
JEL-codes: J17 I12 (search for similar items in EconPapers)
Date: 2006-02-27
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Journal Article: Labor market estimates of the senior discount for the value of statistical life (2007)
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