Working Paper: NBER ID: w13722
Authors: Mary F. Evans; V. Kerry Smith
Abstract: This paper considers the factors responsible for differences with age in estimates of the wage compensation an individual requires to accept increased occupational fatality risk. We derive a relationship between the value of a statistical life (VSL) and the degree of complementarity between consumption and labor supplied when health status serves as a potential source of variation in this relationship. Our empirical analysis finds that variations in an individual's health status or quality of life and anticipated longevity threats lead to significant differences in the estimated wage/risk tradeoffs. We describe how extensions to the specification of hedonic wage models, including measures for quality of life and anticipated longevity threats, help to explain the diversity in past studies examining how the estimated wage-risk tradeoff changes with age.
Keywords: No keywords provided
JEL Codes: I12; J17
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| health status (I12) | willingness to accept wage compensation for risk (J33) |
| health status (I12) | value of statistical life (VSL) (J17) |
| perceived longevity (D15) | willingness to pay for risk reductions (D11) |
| longevity threats (C41) | willingness to pay for risk reductions (D11) |
| health status (I12) | complementarity between labor supply and consumption (J29) |
| longevity threats (C41) | wage-risk tradeoffs (J28) |