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Employee Tenure and Economic Losses in Wrongful Termination Cases

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  • Charles L. Baum

Abstract

When calculating lost earnings in wrongful employment termination cases, economists should approximate the amount of time a terminated employee would have remained employed for the defendant employer accounting for the probabilities of surviving, participating in the labor force, being employed, and remaining employed for that particular employer. I develop a model for the annual probability of remaining with a particular employer using National Longitudinal Survey of Youth data, which tracks the employment experiences of a nationally-representative cohort of individuals over the 1979 through 2010 period. Many employment spells are relatively short, so short tenures are associated with a high probability of leaving an employer. After a point, somewhat longer tenures are associated with a higher probability of remaining with an employer an additional year.

Suggested Citation

  • Charles L. Baum, 2013. "Employee Tenure and Economic Losses in Wrongful Termination Cases," Journal of Forensic Economics, National Association of Forensic Economics, vol. 24(1), pages 41-66, April.
    • Handle: RePEc:fek:papers:doi:10.5085/jfe.24.1.41
    DOI: 10.5085/jfe.24.1.41
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    Cited by:

    1. Charles L. Baum, 2022. "Seven jobs in a lifetime? An analysis of employee tenure," Economic Inquiry, Western Economic Association International, vol. 60(2), pages 543-567, April.

    More about this item

    JEL classification:

    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics

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