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

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Date

Oct. 6, 2006

Authors

Kip Viscusi and Joseph E. Aldy

Publication

Journal Article

Reading time

1 minute

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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Authors

Kip Viscusi

Joseph E. Aldy

University Fellow

Joe Aldy is a university fellow at RFF and professor of the practice of public policy at Harvard’s Kennedy School. His research focuses on climate change policy, energy policy, and mortality risk evaluation.

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