Estimating Educational Attainment and Earning Capacity of a Minor Child

Estimating the earning capacity of an injured minor child or newborn raises a variety of economic issues not applicable in a typical adult injury case. A minor child case is more complicated because the child does not have an earnings record or may be too young to have acquired an educational level that will influence future earnings. The purpose of this chapter is to provide a methodology to estimate the probability of a child obtaining each educational level and the corresponding earning capacity associated with each educational level. An ordered probit model is used to estimate the probability of attaining a given educational level based on demographic and familial characteristics.