Calculating Loss of Future Income in Child Injuries

Personal injury cases involving children can be complex. If a child suffers significant injury, like a traumatic brain injury or spinal cord injury, affect his or her quality of life over the long-term, you may be able to seek compensation through a legal claim called “loss of future income.” As a result of the accident, a child may face an entirely different future. This is an overview of how the loss is calculated.

In Texas, a child can recover lost earning capacity after turning 18 (Sax v. Votteler, 648 S.W.2d 661, 666 (Tex. 1983)). While the calculations may vary slightly depending on the circumstances surrounding the case (e.g., the extent of injury, expectation of recovery, child’s age), here is the most common factor used to determine the child’s compensation:

• Expected educational attainment. If a child were to develop normally (without injury), it is likely that his or her performance later in life would be determined by his socioeconomic background. Economists use a probability distribution over several different attainment expectations, which include variables based on family history, education, sex, race, and location.

Using the data from the previous formula, a data scientist can accurately derive an amount that would be very close to a child’s natural earnings over a lifetime in the absence of injury. The model is incredibly complex and requires an expert’s opinion to successfully present in a lawsuit. Despite its complexity, you should consider this option if you seek compensation for injuries to your child sustained in an accident.

Determining a child’s future income levels is inherently problematic. There is no baseline information for the individual’s earnings. Although the model illustrated above provides the best analysis of future earnings, there is no completely accurate way to determine what a child’s earnings may have been.

Challenges Faced by Predicting Future Income

Since human paths vary widely, it can be very difficult to use an average probability to determine the likelihood of lifetime wages. Particularly in families where there is a great degree of variability between earning capacity, education levels, and other factors, there may be more challenge from the defendant during litigation.

An expert witness is invaluable in proving future income earnings in cases of child personal injury. He or she needs to be able to present the equation at an understandable level and explain how the General Social Survey (GSS) guidelines used to predict income levels can be used to accurately describe a child’s future earning potential.

The GSS is compiled yearly by the National Opinion Research Center and features a list of 1,500 questions on social demographics, attitudes, behaviors, and more. It is one of the most accurate data sets describing income in a variety of different circumstances, which is why it is commonly used to determine earning capacity in personal injury cases featuring minors.

In some cases, an attorney may use both an economist and a vocational expert during testimony to strengthen the case. These professionals can cover every element of statistical analysis and real potential for a child who suffered from severe injury in an accident.

Older Children and Earnings

An injured teenager may have another consideration that can affect compensation. If a teen has his or her eyes set on a certain career path and has supporting classes or evidence to indicate that career path will be pursued, it may be the baseline for determining compensation. The child’s attorney can successfully pursue this line of reasoning because future income and earning capacity is not a measurement of actual earnings. A lost career that is more promising than the average employment a child now faces can be enough evidence to secure financial compensation for loss of future income.