The Money Value of a Man

Mark Huggett and Greg Kaplan

No 2012-009, Working Papers from Human Capital and Economic Opportunity Working Group

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 (search for similar items in EconPapers)
JEL-codes: D91 E21 G12 J24 (search for similar items in EconPapers)
Date: 2012-04
New Economics Papers: this item is included in nep-dge and nep-hrm
Note: M
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Citations: View citations in EconPapers (9)

Downloads: (external link)
http://humcap.uchicago.edu/RePEc/hka/wpaper/Hugget ... _money-value-man.pdf First version, 4/1/2012 (application/pdf)
http://faculty.georgetown.edu/mh5/research/MoneyValue.pdf

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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