Compensating wage differentials and the value of a statistical life in Germany

Abstract

"This paper is the first empirical study to determine the value of a statistical life for the Federal Republic of Germany. The analyses are conducted on the basis of a data set composed of the IAB employment sample and information concerning industrial accidents from the employers' liability insurance associations. The panel estimates yield an average value of a statistical life for workers in employment subject to social security contributions of E 1.65 million. This value is clearly below the cross-sectional studies conducted for comparison purposes (mean Euro 4.5 million) and suggests that (also) the results obtained from studies conducted in the USA to date (median US$ 7 million), which are based almost solely on cross-sectional data, are upwardly biased due to the lack of control for unobserved heterogeneity. The results obtained for the value of a statistical life can be used in cost-benefit analyses of projects aimed at risk reduction e.g. in health policy, environmental policy, transport policy and crime policy." (Author's abstract, IAB-Doku) ((en))

Cite article

Spengler, H. (2004): Kompensatorische Lohndifferenziale und der Wert eines statistischen Lebens in Deutschland. In: Zeitschrift für ArbeitsmarktForschung, Vol. 37, No. 3, p. 269-305.