Topics in Wage Growth, Turnover, and Risk for Forensic Economists

Paper Session

Saturday, Jan. 7, 2017 10:15 AM – 12:15 PM

Sheraton Grand Chicago, Wrigleyville
Hosted By: National Association of Forensic Economics
  • Chair: William G. Brandt, Brandt Forensic Economics

Heterogeneity in Wage Growth for Estimating Earnings Loss

David Macpherson
,
Trinity University
William E. Even
,
Miami University

Abstract

Many forensic economics assume a constant rate of wage growth when forecasting earnings losses in a personal injury or wrongful death case. This paper provides new estimates of earnings growth that will allow the economist to provide a more accurate estimate. In particular, it will estimate wage equations allowing for both life-cycle and economy-wide productivity effects on earnings growth. Estimates are also provided by educational attainment and gender. The study concludes by showing the sensitivity of earnings loss estimates to alternative approaches.

The Impact of Oregon's Pension Legacy Costs on New Teacher Turnover

Kevin E. Cahill
,
Boston College
Michael D. Giandrea
,
U.S. Bureau of Labor Statistics
Andrew Dyke
,
ECONorthwest
John Tapogna
,
ECONorthwest

Abstract

Pension legacy costs can restrict the amount of resources available for current public education, potentially making it more difficult to attract and retain high-quality teachers. Oregon provides a useful case study in pension legacy costs because many school districts in the state are now reallocating General Fund expenditures to cover sizeable past pension promises. In this paper, we describe how Oregon’s past pension promises, compared with nearby Washington’s, are affecting the level of resources available to compensate new teachers. We then assess potential impacts by examining how new teacher turnover differs in districts along the Oregon–Washington border and within Oregon across school districts. We find early career quit rates in school districts on the Oregon side of the Oregon–Washington border have exceeded those on the Washington side in recent years, and overall teacher experience on the Oregon side has fallen below that on the Washington side. Further, using district-level variation within Oregon, we find early career quit propensities are positively associated with the percentage of General Fund revenues allocated to Oregon’s Public Employees Retirement System expenditures. These findings are consistent with the notion that Oregon’s pension legacy costs are negatively impacting teacher retention.

An Alternative Definition of Estimation Risk in Determining Economic Damages

Scott Gilbert
,
Southern Illinois University-Carbondale

Abstract

The present work proposes an ex ante measure of estimation risk, for the estimation of economic loss in personal injury and related cases, based on expected absolute deviations between future labor earnings and the amount of funds estimated to cover those earnings. The focus here on absolute deviations differs from the use of squared deviations in Gilbert (2016). With both approaches, the estimation risk-minimizing lump sum award is the discounted sum of projected future earnings, with discounting via a current bond ladder, but earnings projections take the form of conditional median values when risk is based on absolute deviations, as opposed to conditional mean values when risk is based on squared deviations. A application illustrates the methods.
Discussant(s)
Gary Skoog
,
Legal Econometrics Inc.
David Rosenbaum
,
University of Nebraska-Lincoln
Lane Hudgins
,
Lane Hudgins Analysis
JEL Classifications
  • J2 - Demand and Supply of Labor
  • K1 - Basic Areas of Law