Median Worklife, Mean Age at Final Separation, or Transition Probabilities to Calculate Expected Lost Earnings?

Abstract

No abstract available.

Loss of Earnings Following Personal Injury: Do the Courts Adequately Compensate Injured Parties?

“…The most popular technique involves the use of worklife tables, originally published by the Bureau of Labor Statistics (Smith, 1982) and updated in a number of recent studies, to produce a fixed number of years of working life (Brookshire and Slesnick, 1997; Thornton and Slesnick, 1997). Other single figure approaches include simply taking years to retirement or the median/mean years to final separation (Bell and Taub, 1998; Ciecka et al , 1997; Schieren, 1993;). Two methods that involve year‐by‐year representations of labour force activity are those based upon the transition probabilities that feed into the worklife expectancy tables (Alter and Becker, 1985; 1987) and the use of unconditional year‐by‐year life, participation and employment probabilities (Brookshire and Cobb, 1983).…”

“…Although the use of transition probabilities to estimate expected annual earnings is theoretically superior it is also computationally more complex and, as a consequence, has proved to be less acceptable to the courts. In practice, the preference of the US courts may not matter since Schieren (1993) finds that the Alter and Becker approach produces estimates of loss of future earnings that are little different to worklife expectancy predictions.…”