WAGE DIFFERENTIALS AND RISK OF DEATH: AN EMPIRICAL ANALYSIS

The relationship between variations in police salaries and the risk inherent in police employment in 72 US central cities is examined. The findings support the willingness-to-pay model of life valuation, which suggests that increases in the frequency of death will be accompanied by wage increases, after labor market adjustments have taken place. The value of a police officer's life is computed at $584,249 in 1979 dollars, between estimates obtained from other data sets for other types of workers, using different methologies. A risk differential of 1.4% was determined. Further, results support evidence showing that the value of life based on behavior towards risk in a market setting is substantially greater than the value of lost earnings, based on a method commonly used in the courts and in cost-benefit studies.