A person whose work was the household rather than the labor market has an economic loss when an injury or a death ends that work, and the loss is measured the same way an employer's payroll is: by the hours of work removed and what it costs to replace them. The economist establishes the hours a homemaker spent on each category of household work from the family's account and published time-use data, prices each category at the local wage for the occupation that does that work, and carries the value over the years the work would have continued, adjusting as the household changes. This guide explains each step and the arguments that recur on both sides.
A household runs on work. Meals are cooked, children are cared for and driven, the house is cleaned and repaired, the yard is kept, the bills are paid, the shopping is done, and the family's affairs are managed. When one member does most of that work full time, the household receives a stream of services that has a market value, because every one of those tasks is also sold by someone for a wage. An injury that ends the homemaker's ability to do the work, or a death that removes the homemaker from the household, imposes a cost the household did not bear before: the work is done by others who could have been doing something else, is bought from outside, or goes undone. The household services valuation measures that cost.
The loss does not depend on a paycheck. A homemaker with no earnings history has no lost earnings claim, but the services claim stands on its own and is often the largest component of the household's economic loss. The household services guide describes the component in an injury case generally; this guide concerns the person for whom the household was the whole of the work.
The first input is the hours the homemaker spent on household work before the event, by category: meal preparation and cleanup, housekeeping and laundry, care of children or of an adult who needs it, shopping and errands, home and vehicle maintenance, yard work, household management, and travel connected to any of them. The family's own account supplies the household's pattern, and published time-use data supply the hours a person of the homemaker's sex, age, employment status, and household composition typically spends on each category. The two are read together: the survey figures keep the account within the range the data support, and the account explains where this household differed from the average and why.
A full-time homemaker's hours are high, and the time-use data confirm it, because a person who is not employed spends many more hours on the household than one who is. The report uses the row for a person who was not employed, not the row for the population as a whole, and it says so, because reading the wrong row understates the loss from the start. The household services method page sets out the categories and the survey the hours come from.
Each category is priced at what it costs to hire someone to do that work in the household's area: a cook's wage for meal preparation, a housekeeper's for cleaning and laundry, a childcare worker's for the care of children, a home health aide's for the care of an adult, a maintenance worker's for repairs, and so on. The wages come from the published occupational wage series for the metropolitan area or the state, and the report names the occupation and the series it used for each category. This is the replacement cost approach, and it values the work at what the household would have to pay to receive it, not at what the homemaker might have earned in some other job.
The alternative approach, valuing the hours at the wage the homemaker gave up by staying home, is sometimes argued for a person with a professional history, and it can produce a larger or a smaller figure. The economist can present it where the record supports a specific foregone wage, but the replacement cost figure is the one that measures what the household lost, and the report keeps the two apart. A generalist wage, a single blended rate for all categories, is a simpler alternative the report can show for comparison; it understates the categories that command a skilled wage and overstates the routine ones.
In a death case the entire stream is lost, and the question is how long it would have run. In an injury case the homemaker may still do some of the work, and the loss is the difference between the pre-event hours and what the person can now do, category by category. The medical evidence describes the physical and cognitive limits; the economist applies them to the categories, since a back injury may end yard work and heavy cleaning while leaving meal planning and household management intact. A person who can do a task slowly, or with help, or only on good days has a partial loss in that category, and the report states the reduction it applied and where the figure came from.
The mitigation and offsets page describes how the post-event hours are treated. What the household has actually paid for help since the event is evidence of the loss and of the going rate, but it is not the ceiling, because a household that has gone without help has lost the services all the same.
Household work does not stop at a retirement age, so the horizon is life expectancy from the current life tables rather than a worklife horizon, reduced in the later years by the decline in hours that the time-use data show for older people. The hours also change with the household. Childcare hours fall as children grow and end when they leave; the hours of a person caring for an aging parent end with the parent; a couple's housekeeping hours in an empty house are fewer than a family's. The report dates each change from the ages in the record and applies the hours that fit each period rather than freezing the household on the date of the event.
The value is then carried year by year, grown at the rate the replacement wages are expected to grow, and reduced to present value at a rate tied to low-risk yields, so the same conventions govern this component as the earnings component. The present value page explains the discounting, and a Texas wrongful death page shows how the component sits inside a survivors' claim in one venue.
Defense reports commonly argue that the hours are overstated, that the household has adapted so the work is being done, that the family has not hired anyone, or that a general laborer's wage should price every category. Plaintiff reports commonly overstate the hours by counting time the homemaker spent on personal activities, price routine tasks at a skilled wage, or run childcare hours past the age at which children need care. The reply to each is the same: the hours come from the family's account checked against the survey data for a person in the homemaker's circumstances, the categories are priced at the occupation that does the work, and the horizon follows the household as the record dates it. A report built that way can show the figure under the other side's assumptions as well as its own, which is the most persuasive answer to any of the arguments. The rebuttal guide collects the questions.
Not as the primary measure. The household lost services, and the services are valued at what it costs to replace them, category by category, from local wage data for the occupations that do the work. A foregone professional wage can be presented alongside where the record supports it, but it measures a different thing and the report keeps the two apart.
No. Childcare hours are dated to the ages of the children in the record and fall as each child grows, ending when the youngest reaches the age at which the time-use data show the care ending. The other categories continue over life expectancy and taper in the later years.
Because the hours a person spends on the household depend heavily on whether that person also holds a job, and the survey reports the two groups separately. A full-time homemaker's hours are read from the row for a person who was not employed; reading the population average would understate the loss before any other question was reached.
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