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

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  • Viscusi, W. Kip
  • Aldy, Joseph

    (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.

Suggested Citation

  • Viscusi, W. Kip & Aldy, Joseph, 2006. "Labor Market Estimates of the Senior Discount for the Value of Statistical Life," RFF Working Paper Series dp-06-12, Resources for the Future.
    • Handle: RePEc:rff:dpaper:dp-06-12
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    File URL: http://www.rff.org/RFF/documents/RFF-DP-06-12.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    value of statistical life; job risks; senior discount; compensating differentials;
    All these keywords.

    JEL classification:

    • J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

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