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Estimating Worklife Expectancy and Earnings Capacity

Paper Session

Saturday, Jan. 4, 2020 8:00 AM - 10:00 AM (PDT)

Manchester Grand Hyatt, Marina
Hosted By: National Association of Forensic Economics
  • Chair: Constantine M. Boukidis, VWM Analytics

Worklife and Unemployment: A New Consideration

David Rosenbaum
,
University of Nebraska-Lincoln
Kalana Jayanetti
,
Mutual of Omaha

Abstract

The standard worklife model has two labor market states, active and inactive. The active state includes those who are either employed or unemployed. The inactive state includes those out of the labor market, included the marginally attached. For many employed workers, there is some chance they may become unemployed, but little chance they will become marginally attached. We develop a three-state model to account for unemployment and exclude the marginally attached. In our model, the marginally attached are removed from the ranks of the inactive. In addition, the active are separated into two states, employed and unemployed. Our goal is to examine the bias imposed by the two-state as opposed to three-state worklife model.

Seven Careers in a Lifetime? An Analysis of Employee Tenure

Charles L. Baum II
,
Middle Tennessee State University

Abstract

This analysis examines the number of jobs and careers and employer-specific tenure lengths for a cohort of relatively young workers. Young workers today have many jobs and many careers—at least seven—over the first decade or two of their careers. The majority last no more than a year. Hazard models show that short tenures are associated with a higher probability of leaving an employer. However, fixed effects models suggest this is partially due to dynamic self-selection. Workers with longer tenures are less likely to separate regardless of tenure. The effect of tenure on the hazard for separating is non-monotonic.

Estimating the Present Value of Earning Capacity for an Undocumented Worker

Nikanor I. Volkov
,
Mercer University
Thomas Roney
,
Thomas Roney LLC
Brittany Pearce
,
Thomas Roney LLC

Abstract

We propose a model for a computation of future earnings (earning capacity) for an undocumented worker. The model has a significant practical implications for the legal community and forensic economics. The model establishes a methodology for computing the future earnings (earning capacity) while controlling for the probability that the undocumented worker will be deported or will voluntarily return to his/her home country. Both a linear and a Markov process model are considered and illustrated. We propose several data sources that may be utilized by practitioners in estimating the model parameters. Additionally, we provide an overview of the case law (by state) as it pertains to the treatment of the calculation of economic damages in personal injury and wrongful death cases involving unauthorized workers.
Discussant(s)
Gary Skoog
,
Legal Econometrics, Inc.
Craig Allen
,
Commonwealth Research Group
Stephen Horner
,
Consulting Economist
JEL Classifications
  • K2 - Regulation and Business Law