Parameters for Estimation of Earnings Loss of Hispanics: Life and Work-Life Expectancies, Unemployment Rates and Levels of Earnings by English Language Proficiency

By Richards, Hugh | Journal of Legal Economics, Fall 1998 | Go to article overview

Parameters for Estimation of Earnings Loss of Hispanics: Life and Work-Life Expectancies, Unemployment Rates and Levels of Earnings by English Language Proficiency


Richards, Hugh, Journal of Legal Economics


I. Introduction

Persons of Hispanic origin represent one of the fastest growing working groups in the United States. Their rate of growth in the U.S. work force during the 1980s and early 1990s was nearly foul times that of non-Hispanics, and the Bureau of Labor Statistics projects that by 2006 the Hispanic labor force will be greater than that of blacks. Thus, throughout the country, and especially in certain regions, their prevalence in forensic economic analyses will also increase.

Estimates of earnings losses for Hispanics can be derived utilizing data from Current Population Reports or the 1990 Census of the Population. However, these data do not address certain of this group's characteristics which can markedly affect estimates. For example, life expectancies of Hispanics are longer than those of the general population. Similarly, and especially for males, work-life expectancies for Hispanics are greater than those of the general population at most education levels. Furthermore, as other researchers have shown, language fluency is a strong determinant of earnings among Hispanics (McManus, Gould, and Welch 1983; Grenier 1984; Tainer 1988). In fact, English language proficiency affects nearly all the factors that forensic economists need to estimate lifetime losses for Hispanics, i.e., work-life expectancies, unemployment rates, and average annual earnings.

This paper will discuss these factors for Hispanics by sex, education and, where relevant, by proficiency in English. The remainder of the paper is organized as follows. Section II lists data sources and discusses the educational and English language proficiency categories. Section III discusses methodology and the necessity of using educationally weighted averages for life and worklife expectancies of the general population. Section IV deals with life expectancies, section V with work-life expectancies, section VI with unemployment rates, and section VII with annual earnings. Finally, section VIII provides examples for high school graduates of ranges in earnings estimates that incorporate all of the above factors.

II. Data Sources

Mortality data come from the National Longitudinal Mortality Study, a large national study of the U.S. noninstitutionalized population in which selected economic, demographic and social characteristics were measured from 12 different cohorts spanning the years 1979 through 1985. Ten of the NLMS cohorts were used in this study; they were initially surveyed by the Bureau of the Census for the Current Population Surveys (CPS) of March 1979, April 1980, August 1980, December 1980, and March of the years 1981 through 1985. The samples in the NLMS were matched to the National Death Index to determine deaths that occurred between 1979 and the end of 1989. The initial sample population of all races for the 10 cohorts was 1,046,959, and the number of matched deaths during the period was 69,385.

All other mortality data come from the 1990 U.S. Decennial Census of the Population. The labor force and English language proficiency data are from the 1990 Census of the Population 5% "Public Use Microdata Samples" (PUMS). The samples selected for this research include Hispanic persons 18 years of age and older and consist of 336,896 females and 336,645 males. The earnings data for calculation ofthe various effects of English language proficiency come from PUMS and, for comparison of Hispanic earnings to those of general population, from the 1990 Census, "Earnings by Occupation and Education."

Labor force participation and unemployment were "snapshots" as of the last week of March 1990. Persons in the labor force were those who had worked, those who were on layoff or temporarily absent from work, and those who were unemployed but had been looking and available for work during the last four weeks. (These were defined from the RLABOR field of the PUMS database.) Labor force participation rates were calculated as the ratio of persons in the labor force to the total population at each sex, age, education, and degree of English language fluency, where relevant. …

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