Description
This paper suggests using multiple labor market indicators for determining whether a plaintiff mitigated damages in a loss of employment case. The ratio of Help Wanted Ads per Employed Worker (“Ad Rate”) which compares counts of online help wanted advertisements to the number of employed persons, can be used as an indicator of the competition for available jobs in a specific occupation and geography. This measure is validated in two ways: (1) a time series regression comparing the ratio of help wanted ads per employed worker to new hires; and (2) a cross-section occupational model comparing the log of help wanted advertisements per employed worker to labor market indicators—such as the unemployment rate, change in employment, and change in wages—from prior research on labor shortages. A database containing over one billion help wanted ads, which can be accessed for use in mitigation analysis, is described. Case studies are presented to demonstrate the application of this approach.
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