- Title
- The Money Value of a Man
- Author(s)
- Mark Huggett Mark Huggett (Georgetown University)
- Greg Kaplan Greg Kaplan (Princeton University)
- Abstract
- 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.
- Creation Date
- 2013-07
- Section URL ID
- CEPS
- Paper Number
- 238
- URL
- https://gceps.princeton.edu/wp-content/uploads/2017/01/238kaplan.pdf
- File Function
- Jel
- D91, E21, G12, J24
- Keyword(s)
- Value of Human Capital, Return on Human Capital, Idiosyncratic and Aggregate Risk, Incomplete Markets, Heterogeneous Agents
- Suppress
- false
- Series
- 3