NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Money Value of a Man

Mark Huggett, Greg Kaplan

NBER Working Paper No. 18066
Issued in May 2012
NBER Program(s):   AP   EFG   LS

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.

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This paper was revised on May 22, 2013

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Document Object Identifier (DOI): 10.3386/w18066

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