The Money Value of a Man

Mark Huggett and Greg Kaplan ()
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Mark Huggett and Greg Kaplan: Department of Economics, Georgetown University, http://www9.georgetown.edu/faculty/mh5/
Authors registered in the RePEc Author Service: Greg Warren Kaplan and Mark Huggett

Working Papers from Georgetown University, Department of Economics

Abstract: This paper posits a notion of the value of an individual's human capital and the associated return on human capital. These concepts are examined using U.S. data on male earnings and financial asset returns. We decompose the value of human capital into a bond, a stock and a residual value component. We find that (1) the bond component of human capital is larger than the stock component at all ages, (2) the value of human capital is far below the value implied by discounting earnings at the risk-free rate, (3) mean human capital returns exceed stock returns early in life and decline with age and (4) human capital returns and stock returns have a small positive correlation over the working lifetime.

Keywords: Value of Human Capital; Return on Human Capital; Asset Pricing; Idiosyncratic and Aggregate Risk (search for similar items in EconPapers)
JEL-codes: D91 E21 G12 J24 (search for similar items in EconPapers)
Date: 2012-01-02
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Citations: View citations in EconPapers (11)

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Related works:
Working Paper: The Money Value of a Man (2013)
Working Paper: The Money Value of a Man (2012)
Working Paper: The Money Value of a Man (2012)
Working Paper: The Money Value of a Man (2012)
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