Detailed Estimation of Worklife Expectancy for the Measurement of Human Capital: Accounting for Marriage and Children

Abstract

Measuring an individual's human capital at a point in time as the present actuarial value of expected net lifetime earnings has a lengthy history. Calculating such measures requires accurate estimates of worklife expectancy. Here, worklife estimates for men and women in the USA categorized by educational attainment, race, marital status, parental status and current labour force status are presented. Race has a much larger impact on the worklife expectancy of men than women. Education is associated with larger worklife differentials for women. The association between marriage and worklife expectancy is significant, but of opposite sign, for men and women: married women (men) have a lower (higher) worklife expectancy than single women (men). Parenthood is associated with a reduction in the worklife expectancy of women; the association is smaller and varies from positive for some education/marital status groups to negative for others for men.

Recent trends in US working life expectancy at age 50 by gender, education, and race/ethnicity and the impact of the Great Recession

“…This estimate for women is lower than our estimates, which are between 10.7 and 11.6 years, but the Smith paper covers an earlier period in which female labor force participation was lower. The findings of Millimet et al (2003Millimet et al ( , 2010, which cover the period from 1992 to 2000, are on a different level than our estimates for the period 1993-1997, because they use a different definition of working life expectancy. But these findings are qualitatively similar with respect to the differences between groups.…”

Alcohol Consumption and Human Capital: A Retrospective Study of the Literature

“…Thus the impact of alcohol consumption on health could also be considered as an element of a person's intangible investment in human capital as discussed in Folloni and Vittadini (2010). Furthermore, the impact of a person's life history of such health related activities such as drinking, smoking, diet and exercise could be used to identify the health related aspects of their worklife expectancy as defined by Millimet et al (2010). An alternative approach to the use of regression analysis for measuring the impact of alcohol would be the latent variable approach proposed by Lovaglio (2010) where the administrative data used in this research could be complemented by health records.…”

Human Capital Measurement: A Survey

“…The choice of a discount rate involves some subjective judgment, but most importantly a forward‐looking dynamic economy is interested in evaluating its future productive capacities, not in estimating the ‘stock of the wealth from historical values’ (Graham and Webb, 1979). See, for example, Millimet et al (2010) for new and more accurate methods to build worklife expectancy tables.…”