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Labor market estimates of the senior discount for the value of statistical life

  • Kip Viscusi, W.
  • Aldy, Joseph E.

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.

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Article provided by Elsevier in its journal Journal of Environmental Economics and Management.

Volume (Year): 53 (2007)
Issue (Month): 3 (May)
Pages: 377-392

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Handle: RePEc:eee:jeeman:v:53:y:2007:i:3:p:377-392
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622870

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