Who do you usually expect to meet after a serious accident?

A doctor. A police officer. An insurance adjuster. If you've hired a lawyer, you'll probably spend plenty of time speaking with them, too.

An economist? Most people don't expect that.

Yet in many serious personal injury cases, an economist can become one of the most important experts involved. Their work doesn't revolve around reconstructing the accident or deciding who was at fault. They're brought in for a different reason: putting a dollar value on financial losses that may continue long after the accident itself.

That's especially important when someone can't return to the same job, earns less because of permanent injuries, or will need ongoing medical care for years to come.

We'll look at what economists contribute to a personal injury claim, how they calculate future losses, and why their opinions often become part of settlement negotiations or courtroom testimony.

Key Takeaways: The Role of an Economist in a Personal Injury Claim

• A forensic economist estimates the financial impact of an injury using employment records, government wage data, medical opinions, and accepted economic methods.
• Economists are most often involved in cases involving permanent disabilities, reduced earning capacity, wrongful death, or substantial future medical expenses.
• Financial projections rely on information supplied by physicians, vocational experts, employment records, and labor statistics, not speculation.
• Economic damages may include future income, employee benefits, retirement contributions, household services, and projected medical costs expressed in today's dollars.
• An economist provides an independent financial opinion. Attorneys, insurance companies, judges, and juries decide how much weight to give that analysis.

What Does an Economist Do in a Personal Injury Claim?

Economists spend their careers analyzing numbers. In a personal injury claim, those numbers tell the financial story of the injury.

Suppose a 38-year-old electrician suffers a spinal cord injury and can no longer climb ladders or lift heavy equipment. Medical records explain why he can't return to construction work. Payroll records show what he earned before the accident. A vocational expert evaluates whether another career is realistic.

An economist takes those pieces and estimates how the injury may affect his finances over the rest of his working life.

The National Association of Forensic Economics describes forensic economics as the application of economic methods to legal disputes. In practice, that means evaluating financial losses using recognized economic principles, labor market data, employment records, and other objective information rather than assumptions or rough estimates.

Depending on the case, an economist may review:

• Tax returns and payroll records
• Employment history and expected career progression
• Retirement and pension contributions
• Employer-paid health insurance and other benefits
• Government wage data for similar occupations
• Work-life expectancy tables
• Inflation and present-value calculations

The final report doesn't tell a jury what a case is worth. It gives everyone involved a documented financial analysis built on available evidence and established economic methods.

Economists also depend on the work of other experts.

Physicians describe the injury, treatment, and any permanent medical restrictions. Vocational rehabilitation specialists evaluate how those restrictions affect future employment. Life care planners estimate the medical care someone may need throughout their lifetime.

An economist uses those findings to calculate the financial consequences associated with each of them.

When Economic Testimony May Be Needed

Plenty of personal injury claims move forward without an economist ever becoming involved.

Someone who misses a few weeks of work, recovers fully, and returns to the same job usually doesn't need decades of financial projections.

The picture changes when an injury affects someone's future.

Economic testimony frequently appears in cases involving:

• Traumatic brain injuries
• Spinal cord injuries
• Amputations
• Severe burns
• Permanent disabilities
• Wrongful death
• Reduced earning capacity
• Extensive future medical care

Picture two construction workers earning the same salary before separate accidents.

Both suffer leg fractures. One returns to work six months later with no permanent restrictions. The other develops lasting mobility limitations and can no longer perform physically demanding work. He accepts a lower-paying office position after exhausting rehabilitation options.

An economist helps measure those differences by examining far more than lost wages. Retirement contributions, employer benefits, expected promotions, household services, future earning capacity, and projected medical expenses may all become part of the analysis when supported by the available evidence.

No economist can predict the future with complete precision. What they can do is build a financial projection using documented records, government labor statistics, and the opinions of other qualified experts.

The process has also become more collaborative in recent years. The Journal of Life Care Planning explains that economists produce stronger financial analyses when life care planners clearly document treatment schedules, replacement timelines for medical equipment, and anticipated long-term healthcare needs before economic calculations begin. Better coordination reduces assumptions and creates more reliable projections of future economic losses.

How Lost Earning Capacity Is Calculated

When people hear "lost wages," they usually think about the paycheck they missed while recovering from an injury.

Lost earning capacity is different. It looks ahead and asks how an injury may affect someone's ability to earn a living over the rest of their working life.

Economists often review information such as

• Earnings history and tax returns
• Education, training, and specialized skills
• Career progression before the injury
• Employee benefits, bonuses, and retirement contributions
• Expected work-life expectancy
• Government wage data for similar occupations
• Inflation and present-value calculations
• Medical restrictions documented by treating physicians
• Vocational rehabilitation evaluations describing future employment options

The economist isn't deciding whether someone can return to work. Medical professionals and vocational experts provide those opinions first. The economist uses those findings to estimate how they may affect future earnings.

Federal labor data often plays an important role as well. The U.S. Bureau of Labor Statistics publishes annual wage estimates for hundreds of occupations across the country. Economists frequently compare an injured person's employment history with these datasets when projecting future earnings and evaluating labor market opportunities. 

In May 2024, the Bureau reported employment and wage estimates for more than 830 occupations through its Occupational Employment and Wage Statistics program, providing one of the primary government data sources used in economic analysis. 

Future earnings also aren't calculated by multiplying someone's current salary by the number of years until retirement.

Career advancement, changing labor markets, inflation, taxes, employee benefits, expected retirement age, and work-life expectancy can all influence the projection. Those variables explain why two economists reviewing the same case may reach somewhat different conclusions, even when they rely on many of the same records.

How Future Costs Are Projected

Income is only one part of the financial impact following a serious injury.

Some people require years of physical therapy. Others need multiple surgeries, wheelchairs, prosthetic devices, home modifications, prescription medications, or in-home assistance long after the accident.

Estimating those expenses begins with medical evidence, not economics.

Treating physicians explain the injury and expected medical needs. In catastrophic injury cases, a certified life care planner may prepare a detailed report describing the treatment, equipment, therapies, medications, and support services a person is expected to need throughout their lifetime.

An economist then evaluates the financial side of that plan.

Depending on the circumstances, the analysis may include:

• Future surgeries and hospital care
• Rehabilitation and physical therapy
• Prescription medications
• Mobility equipment and replacement schedules
• Home or vehicle modifications
• Attendant or nursing care
• Transportation for ongoing treatment
• Household services the injured person can no longer perform

Depending on the governing law and the type of damages involved, an economist may convert future losses into present value, which expresses future amounts in today's dollars. The rules governing whether and how future damages are reduced to present value vary by jurisdiction and type of claim.

Small changes in assumptions about inflation, investment returns, or future medical needs can affect the final numbers. That's one reason each side may hire its own economist and arrive at different conclusions.

Economic reports can also change over time. As treatment progresses or new medical information becomes available, economists may update their projections to reflect the latest evidence.

How Economic Testimony Can Affect Settlement Value

An economist doesn't decide how much a personal injury claim is worth.

Settlement value depends on many factors, including liability, available insurance coverage, the severity of the injuries, medical evidence, witness testimony, and the laws that apply to the case.

Economic testimony addresses one piece of that larger picture: measurable financial losses.

When both sides have detailed evidence about future earnings, medical expenses, or lost retirement benefits, negotiations often become more focused. Rather than debating broad estimates, attorneys can discuss financial projections supported by employment records, medical opinions, labor statistics, and accepted economic methods.

That doesn't mean everyone reaches the same conclusions.

It's common for each side to hire its own economist. Both experts may review the same medical records, tax returns, and employment history, yet arrive at different opinions because they use different assumptions about wage growth, inflation, retirement age, work-life expectancy, or discount rates.

Those differences don't automatically mean one expert is right and the other is wrong. They reflect professional opinions based on the available evidence and the economic methods each expert believes best fit the facts.

Courts generally evaluate expert testimony under rules governing expert evidence, although the applicable admissibility standards vary by jurisdiction. In federal courts, those standards are reflected in Federal Rule of Evidence 702, which was amended in 2023 to clarify that the proponent of expert testimony must demonstrate to the court that it is more likely than not that the rule's admissibility requirements are satisfied. Among other requirements, the testimony must be based on sufficient facts or data, be the product of reliable principles and methods, and reflect a reliable application of those principles and methods to the facts of the case.

To conclude, the economist's report isn't the final word on damages. It's one piece of evidence that may help explain the long-term financial consequences of an injury in a structured and well-supported way.

Frequently Asked Questions:

Does Every Personal Injury Case Need an Economist?

No. Many claims include medical bills and lost wages that you can document without hiring an economist. These experts are more common in cases involving permanent disabilities, significant future medical expenses, wrongful death, or long-term reductions in earning capacity.

Can an Economist Testify in Court?

Yes. Economists are often retained as expert witnesses in both state and federal courts. They may prepare written reports, provide deposition testimony, and testify at trial when future financial losses are disputed.

Can an Economist Calculate Pain and Suffering?

No. Economists generally evaluate measurable financial losses, often called economic damages. Pain and suffering, emotional distress, loss of enjoyment of life, and similar non-economic damages are evaluated separately under the substantive law governing the claim, which may depend on the jurisdiction and applicable choice-of-law rules.

Who Hires The Economist?

Either side may retain an economist. Plaintiffs, defendants, insurance companies, and self-insured businesses all use economic experts when future financial losses become a significant issue in a claim.

Discuss Your Personal Injury Case With Brandon J. Broderick, Attorney at Law

An economist can't erase what happened. What they can do is help explain the financial impact of an injury in a way that's supported by evidence.

For someone rebuilding life after a serious accident, that information can matter.

If you're looking for answers after a serious accident, contact Brandon J. Broderick, Attorney at Law. We're here to listen, explain your options, and help you understand what may be involved in pursuing a personal injury claim. Contact us today for a free consultation.