Adjusting VSL for Age
2008
This article addresses the theoretical ambiguity in the effect of age on the value of statistical life (VSL) using a novel, age-dependent fatal risk measure to estimate age-specific hedonic wage regressions. VSL exhibits an inverted-U-shaped relationship with age. In the year 2000 cross section, workers' VSL rises from $3.7 million (ages 18–24) to $9.7 million (ages 35–44) and declines to $3.4 million (ages 55–62). Controlling for birth-year cohort effects yields a peak VSL of $7.8 million at age 46 and flattens the age-VSL relationship. The value of statistical life-year also follows an inverted-U shape with age.
Source:
Aldy JE, Viscusi WK. Adjusting the Value of a Statistical Life for Age and Cohort Effects. The Review of Economics and Statistics 2008; 90 (3): 573-581. https://doi.org/10.1162/rest.90.3.573