How long do people work?

The heart of analyzing lost earnings and wages is estimating by how much injury or death decreased a person’s lifetime earning capacity.

This requires estimating how many years the injured or deceased party have otherwise continued working. In many cases, the economist will have to choose some assumption for remaining work life. The simplest assumption is that retirement would come at the age of eligibility for full Social Security benefits. An alternative is to use government data on the median number of years to retirement for workers at any given age and assume that the person would have continued employment for that length of time.

These types of assumptions can be problematic in some settings because they ignore the reality that many people do not conform to these retirement patterns. These analyses ignore the fact that workers at any age have some statistical probability of not being able to continue earning income due to death, physical incapacity, or unemployment. To overcome these difficulties, economists most often use published data that allows them to calculate the average number of remaining years of employment people have at any age.