The Cochran Firm Legal Blog

An interesting issue of wrongful death cases when the decedent is a minor is how to calculate the amount of damages that would be fair for the survivors. Somehow the forensic economist must estimate what sort of earnings the child would probably have made over his/her working life and add the estimated value of job benefits, then translate this to a current amount.

Although any amount that is finally arrived at will be approximate at best, there is a general procedure for achieving maximum accuracy in each individual case.

1. Determine the minor’s probable education level

There are several places that supply statistics about education levels and the most often used is that of the U.S. Census Bureau’s Current Population Surveys. That data can be broken down by:

• Race
• Gender
• Grade level achieved
• College but no degree
• An Associate Degree
• B.A., M.A., Ph.D, or any professional degree such as D.D.S or M.D.

If the deceased minor had college-educated parents, statistics show that the child would probably have also gone to college. Recent studies have suggested that while 86 percent of males aged 25 and over are high school graduates or better, only about 30 percent have a B.A. or higher. The minor’s particular family would be considered, as to whether they had started any savings for college tuition, how important they considered their child’s school performance, did they help the child with homework, etc.

2. Determine probable earnings

Once a probable educational level has been determined, recourse can be had again to the Census Bureau data. With the Department of Labor, they publish average earnings based on age and education level. According to the decedent minor’s individual specifics, a forensic economist would choose appropriate data. Did the child’s parents have a profession in mind for him or her? Did the child have a particular ambition? Such questions can be answered with more certainty when the minor was a teenager than when he or she was a young child.

3. Estimate probable earnings growth or shrinkage

Average earnings regardless of education level tend to increase more quickly during the 20s and 30s, then slow down in the 40s and level off or decrease in the 50s and 60s.

4. Factor in inflation and discount to present value

Once some salary figures are calculated, they must be modified for inflation and in this step, data from the Federal Reserve Bank of Philadelphia, the Congressional Budget Office, and the Social Security Administration can be helpful. However, those last two might be best avoided as their data can be influenced by policital agendas. The discount rate can be pegged to a long-term Treasury rate for the least risk.

There is more to consider, such as the minor’s work life expectancy and whether the minor’s probable type of employer would have contributed to his or her 401(k) plan, if the minor had one.

As you can see, there are a lot of assumptions that must be made and a lot of potential disagreement in the numbers determined. But this road map does exist and a reasonable amount of damages is usually arrived at in each wrongful death of a minor.

If you have lost a child because of another person’s carelessness, and would like to know more about your legal choices, please contact our law office today for a free case review. Our offices are conveniently located in all states.

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