Loss of Household Services in Damages

Even when a person does not work outside the home, they produce economic value through unpaid labor. When injury or death reduces that labor, the economic loss is compensable in most jurisdictions.

The economist uses time-use data (BLS American Time Use Survey) to establish typical hours by task, then applies local market wage rates for equivalent services (U.S. Bureau of Labor Statistics, n.d.). The projection is reduced to present value across the remaining life expectancy or worklife as applicable.

Typical categories include childcare, home maintenance, yard work, meal preparation, household management, and transportation. The scope reflects the household composition and the specific services the claimant actually performed.

The claim appears wherever an injury or a death removes labor a household relied on. In a personal injury matter it is pleaded beside lost earnings and is often the larger of the two for a person who worked part time, was retired, or ran the home while a spouse earned: the market wage understates what that person contributed, and the replacement cost states it. In a wrongful death matter the claim belongs to the survivors, for the services the decedent provided to them, and runs over the years the decedent would have kept providing them. In a matrimonial matter a spouse's household contribution is sometimes described in the same replacement-cost terms; whether and how that figure is used is a question for counsel under the governing standard.

The claim is often overlooked where the injured person still lives at home and the family has absorbed the work. That the tasks are now done by a spouse or a child at no charge does not make the loss disappear; it means the replacement is being supplied in kind, and the analysis values what the household would pay to replace it.

The report opens with the household as it was before the injury: who lived in it, who did what, and how the work was divided, taken from the interview and the records. It then sets out a task inventory, category by category, with the hours the person contributed before the injury and the hours the person can still contribute, and states the source of each figure, whether the individual's own account, a family member's account, or the time-use survey averages for a person of the same age, sex, employment status and household composition. A rate table follows, one wage rate per category matched to the occupation that performs the task in the market, with the area and the date of the wage series. The last section carries the duration, the years over which the loss runs, tied to the life or worklife expectancy the case uses, and the annual and present value figures the economist derives from it. Each line can be traced to a source, which is what an opposing review will test.

The household's own records carry more weight than averages. Receipts or invoices for services the family has already hired since the injury show the market price of the replacement directly. A calendar, a childcare schedule, a lawn service contract or a vehicle maintenance log fixes the pre-injury routine. Medical records and any functional capacity evaluation establish which tasks the restrictions reach, so that the report claims the reduction in services and not the whole of them. Tax returns and employment records place the person's paid work hours, which the time-use survey uses to select the comparison group. Where a record does not exist the report says so and states what the analysis assumed in its place.

The household services analysis stops at annual hours and replacement rates. The forensic economist takes those inputs, projects them over the duration, applies the growth and discount assumptions used elsewhere in the damages report so that the household services figure is consistent with the earnings figure, and reports the present value as a separate line in the damages summary. Keeping the two analyses in one engagement, or in coordinated engagements, is what makes that consistency possible: the same life expectancy, the same discount rate and the same valuation date run through both. The household services valuator shows the arithmetic of the replacement-cost step on illustrative inputs.