Earning Capacity in the Quantity Dimension: The State of the Science
AbstractActual earnings are a function of the rate of pay, which we might consider the rate dimension, and the amount of work done, which we might consider the quantity dimension. From Horner and Slesnick (1999), “Earning capacity is the expected earnings of a worker who chooses to maximize the expectation of actual earnings.” Thus, earning capacity is also a function of these two dimensions. The purpose of the current paper is to review the relevant forensic literature that addresses the quantity dimension of earning capacity.
JEL Codes: K13 Forensic Economics; J21 Labor Force and Employment, Size, and Structure; J22 Time Allocation and Labor Supply; J26 Retirement