From: schultz@unixg.ubc.ca (Stewart Schultz)
Subject: Re: How much $$ is enough?
Organization: University of British Columbia, Vancouver, B.C., Canada
Date: Tue, 28 Jul 1992 16:49:58 GMT

In article <1992Jul28.000838.11305@lmpsbbs.comm.mot.com>
bhv@areaplg2.corp.mot.com (Bronis Vidugiris) writes:

>I think more investigation into the actual facts is called for - I would
>tend to guess that the supporters of this bill would tend to put the most
>favorable (for women) twist on the statistics, and that the truth is probably
>highly arguable and open to interpretation.  I'd take a *real* close look
>at the statistics the touters are proposing.

The rationale apparently uses a handful of controlled economic 
studies on the impact of divorce on women's financial status.  But
since these target a small subset of occupations and the population, 
census data is relied on far more heavily.  But the latter is not
collected in a longitudinal format, so the relevant parameters must be 
calculated after adjustment, interpolation, and averaging.  I think 
some assumptions about rate of income gain after re-entry will be 
inevitable in the vast majority of cases.

Here's how it works (from the DoJ report, caps mine):

"One example of the application of an economic model in the 
determination of spousal support is found in the 1989 case of 
Omerod v. Omerod.  Judge Van Duzer of the Hamilton Unified Family 
Court accepted the evidence prepared by Quantilex, an economic 
consulting firm, which estimated the future loss of income resulting 
from a woman's previous interruption of her nursing career to 
assume family responsibilities.

"The case concerned a Ms. Omerod who was employed as a registered 
nurse for 8 years before leaving her job to start a family.  She 
worked part-time in an unrelated field and as a volunteer during the 
16 years in which her main activity was child-raising.  Upon the 
ending of her marriage, Ms. Omerod began retraining to prepare for 
the resumption of work as a nurse.

"The Quantilex analysis used published 1981 Census data on nurses' 
employment income, together with ASSUMPTIONS ABOUT RATES OF 
FUTURE REAL WAGE GROWTH, to project future earnings for a 
hypothetical nurse who had not had the 16 year interruption in her 
nursing career experienced by Ms. Omerod.  Quantilex then projected 
Ms. Omerod's earnings following her re-entry to nursing.  Using a 
discount rate of 2.5 per cent (as prescribed by the Ontario Court), 
quantilex calculated the present value of the income streams 
projected for the "uninterrupted" career and for Ms. Omerod.  The 
present value of Ms. Omerod's projected income stream was 
estimated to be about $103,000 less than if her earning level had not 
been reduced due to her 16 year career interruption.

"Judge Van Duzer accepted the Quantilex evidence and awarded Ms. 
Omerod $103,000 against her former husband's share of the 
proceeds fom the sale of the matrimonial home."


This is the procedure proposed by the Department of Justice to
be used routinely in all future spousal support awards in Canada.

The question begged by this is: if you hired 20 consulting firms
to make the same independent estimate, how much variation would
you get in the final result?  I would suspect a great deal.  This
statistical/hypothetical approach allows wide leeway in 
interpretation, leaving it vulnerable to abuse.  And this is
aside from other problems, such as expectations and agreements
made during the marriage that conflict with the assumptions of the
divorce/family court.

-S. Schultz
Xref: sparky soc.men:13632 soc.women:14009 alt.dads-rights:1557 alt.child-support:2211