This issue's symposium on the use of race and gender statistics in the determination of economic damages originated with a series of papers that were presented at the National Association of Forensic Economics (NAFE) session on the Fair Calculations in Civil Damages Act of 2016, held on June 26, 2017, in conjunction with the Western Economic Association Annual Conference. The Fair Calculations Act, S.3489, was introduced in the 114th Congress on December 1, 2016 after an article appeared in the Washington Post that suggested court awards to injured white and male children were higher than awards
The Fair Calculations in Civil Damages Act of 2016 (the “Act”) proposes that tables of worklife expectancy not taking account of gender be used in the calculation of damages amounts for loss of earnings capacity. This study calculates worklife expectancy tables not taking account of gender, by taking weighted averages of the labor force transition probabilities used by Skoog-Ciecka-Krueger (2011) and calculating the resulting worklife expectancies using the method of Skoog (2002). The weights for the weighted averages are from the period January 2005 through December 2009. This study then examines patterns in worklife expectancies and labor force transition probabilities and provides evidence not in support of the hypothesis that women's lower worklife expectancies are due to events limited to childbearing years. It is seen that at almost all ages and at all levels of education: women's rate of departure from the labor force exceeds that of men, women's rate of entry and return to the labor force is less than that of men, and labor force participation rates are less than those of men. This study finds that women's lower labor force participation rates than those of men are accounted for by a greater incidence for women of the statuses “taking care of house or family” and “in retirement.” Combined gender worklife expectancy tables are then applied to the total population, with the result that mean worklife expectancies are higher for women than men at ages 30 and under, and progressively lower for women than men as age increases beyond age 30.Abstract
If enacted into law, the Fair Calculations Act would require forensic economists to ignore an injured party's gender when forecasting the loss in future earnings. We discuss how this would affect the size of awards for men and women, and some of the issues that would arise if the law is enacted. Of particular interest is the extent to which gender differences in earnings, earnings growth, and worklife expectancy are the result of sex discrimination in labor markets as opposed to sex differences in preferences. We present evidence that gender differences in human capital characteristics explain a large share of gender differences is in labor market outcomes, though there is considerable disagreement about how to interpret these results. We also show that gender differences in earnings are diminishing over time, but it is not likely that the gap will disappear in the near future. Finally, we discuss how forensic economists may have to rely on additional information when forecasting earnings if they are no longer allowed to use gender.Abstract
The Fair Calculations Act seeks to prohibit courts from using race, ethnicity, gender, religion, or actual or perceived sexual orientation in awarding damages to plaintiffs in civil actions. The legislation died in the 114th Congress but a similar bill was introduced in the House of Representatives and the Senate on September 19, 2019 and is in the early stage of the legislative process. California's Senate Bill No. 41 (2019) which is similar to the Fair Calculations Act became law on January 1, 2020. This case study examines economic damages of a male and female child suffering the same traumatic injury from an automobile collision shortly after birth assuming that some future version of the Fair Calculation Act becomes law.Abstract
This study is a modification of the Kane, Spizman, and Donelson, (2013) model for educational attainment of children. The primary modification is to provide separate models for children who lived with both parents compared to those who did not to allow for differential impacts of family characteristics by household type on the children's educational attainment. The study also (1) captures five additional years of educational attainment data that were not available for the Kane, et al., (2013) study, (2) does not impose a functional form on some of the independent variables, (3) modifies the model to facilitate the inclusion of observations for which some data are missing, and (4) provides estimates for the average age at the time various degrees are obtained. The results show that the education levels of both parents are impactful for the educational attainment of children who lived with both parents and that there is no statistical difference between the impact of mother's and father's education level. In contrast, the results show the relatively greater impact of the mother's compared to the father's educational level on the educational attainment of children in households that did not include both parents.Abstract
This paper contains worklife expectancies (WLE) of railroad workers based on the Twenty-Seventh Actuarial Valuation (Bureau of the Actuary, 2018), thereby updating the previous study of railroad workers' WLE based on the Twenty-Fifth Actuarial Valuation (Bureau of the Actuary, 2012). The main results of this paper are shown in a set of tables.1Abstract
Healthy life expectancy (HLE) combines a measure of morbidity with life expectancy to measure the average years of healthy life (YHL) projected for a cohort based on age, sex, and perhaps race or other characteristics, developed by public health officials to set goals and measure accomplishments in improving public health. Some forensic economists have adopted this data source to project how far into the future lost household or personal services should appropriately be claimed in case of death or injury. The measure of YHL adopted for the U.S. by the Department of Health and Human Services is not well suited to this forensic economic application; in the author's opinion, it is likely to overstate years of lost provision of household or personal services for an average member of the cohort; whether or not this opinion is correct, use of HLE invites vigorous cross-examination. The note concludes with suggested modification that would remove two objections to use of the measure for forensic economic application.Abstract
This study examines the importance of using appropriate inflation measures in the estimation of a life care plan value. Using data from 1989 through 2018, we compare medical inflation rates measured by the Consumer Price Index Medical (CPI Medical) and the Personal Consumption Expenditures Health (PCE Health) price index while discussing the reasons why the indices differ. We also explain why certain policymakers favor the Personal Consumption Expenditure (PCE) over the Consumer Price Index (CPI). In demonstrating how the value of life care plans can differ based upon the use of either of these indices we applied 10-year historical arithmetic averages of both indices to a large hypothetical life care plan. Our calculations indicate that using the CPI versus the PCE results in a difference that is 7.5 times the initial value of the plan, after accumulation of nominal annual values that are undiscounted to present value. We also show how the difference between using the CPI Medical versus the PCE Health increases over time, implying that using one price index or the other will have a greater impact on life care plan values the longer the projection period. Our analysis shows that experts should consider the use of PCE indices when valuing life care plans.Abstract
This paper updates the ordered probit educational attainment model by Kane, Spizman and Donelson (2013) using round 18 of the National Longitudinal Survey of Youth (1997).Abstract