Forecasting Earnings Losses of the Disabled with the Lpe Method

The LPE method is commonly used to forecast lifetime earnings losses. However, we show that there are several difficulties with the method as it is often applied in disability cases. These difficulties arise both from the inadequate nature of the data with which the LPE method is often used, as well as from the LPE methodology itself. As a consequence we argue that, while the disability version of the LPE model is still useful, it is best restricted to forecasting the earnings losses of persons with severe and permanent disabilities