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How Large is the Stock Component of Human Capital?

Mark Huggett, Greg Kaplan

NBER Working Paper No. 21238
Issued in June 2015
NBER Program(s):Asset Pricing, Economic Fluctuations and Growth, Labor Studies

This paper examines the value of an individual’s human capital and the associated return on human capital 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 and (2) the stock component of the value of human capital is smaller than the bond component at all ages. The stock component averages less than 35 percent of the value of human capital at each age.

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Document Object Identifier (DOI): 10.3386/w21238

Published: Mark Huggett & Greg Kaplan, 2016. "How large is the stock component of human capital?," Review of Economic Dynamics, vol 22, pages 21-51. citation courtesy of

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