Worklife Expectancy: How Economists Project Remaining Work Years

Rather than assuming a fixed retirement age, worklife expectancy applies transition probabilities between active and inactive labor force states (Skoog et al., 2011). The result is expected remaining active years based on observed population patterns.

Tables are stratified by age, sex, education, and current labor force status (U.S. Bureau of Labor Statistics, n.d.). The interaction of these factors produces different expected worklives for otherwise similar claimants.

Peer-reviewed literature supports adjustments for catastrophic injuries including spinal cord injury (SCI) and moderate-to-severe traumatic brain injury (TBI), reflecting earlier labor-force withdrawal and reduced employment probability.

Worklife expectancy is rarely argued in a case about a documented past wage loss; it is argued when a future stream has to be bounded and the two sides' economists reach different bounds. The usual sources of disagreement are the stratum and the convention rather than the arithmetic. One report may classify the claimant by the education completed, the other by a credential in progress; one may treat a claimant who was between jobs on the valuation date as active, the other as inactive, which changes the expectancy materially at some ages. One report may use the expectancy as a fixed horizon while the other applies year-by-year participation probabilities, so the two loss figures diverge in the later years even from the same table. Claimants near a conventional retirement age, claimants with a documented plan to work past it, self-employed claimants whose participation the survey categories fit poorly, and young claimants with a short work history are the cases in which the choice moves the total the most. In a wrongful death matter the decedent's worklife bounds the support projection, and the same disagreements arise there.

The worklife section of a damages report can be read quickly once its parts are known. It names the table and its edition, then the four inputs that select the row: the claimant's sex, age on the valuation date, education and labor force status on that date. It states the expectancy read from that row and whether it is the mean or a percentile. It then says how the figure was applied: as a horizon age at which the projection stops, or as a participation probability applied to each future year. Where the report adjusts the published figure, for a documented plan to work longer or for a severity-specific reduction, it names the basis. A well-prepared report closes the section with a sensitivity line showing how the total moves if the other convention or the neighboring stratum is used, so the court can see how much of the number rests on this one choice. The method page explains how the tables are built and how the figure enters the projection.

When the injury itself is expected to shorten the working life, two adjustments compete for the same effect and only one of them should carry it. The first is a reduced post-injury worklife drawn from the severity-specific literature for conditions such as spinal cord injury and moderate to severe traumatic brain injury, which document earlier withdrawal from the labor force. The second is the vocational expert's opinion that the person can work only part time or intermittently, which reduces the annual earnings rather than the years. A report may use either, and in some cases both, but it must say which limitation each adjustment reflects, because applying a reduced wage and a reduced worklife to the same restriction counts it twice. The economist's usual practice is to take the participation input from the vocational opinion and to shorten the horizon only where the medical evidence and the literature support it. The record needed for either adjustment is the same: the treating providers' statement of the permanent restrictions and their expected course.