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The Money Value of a Man

  • Mark Huggett
  • Greg Kaplan

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 find that (1) the value of human capital is far below the value implied by discounting earnings at the risk-free rate, (2) mean human capital returns exceed stock returns early in life and decline with age, (3) the stock component of the value of human capital is smaller than the bond component at all ages and (4) human capital returns and stock returns have a small positive correlation over the working lifetime.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 18066.

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Date of creation: May 2012
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Handle: RePEc:nbr:nberwo:18066
Note: AP EFG LS
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  29. Hanno Lustig & Stijn Van Nieuwerburgh, 2008. "The Returns on Human Capital: Good News on Wall Street is Bad News on Main Street," Review of Financial Studies, Society for Financial Studies, vol. 21(5), pages 2097-2137, September.
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