Explain the following theories of handling permanent partial disability cases: whole-person, wage-loss, and loss of wage-earning capacity

Question

What will be an ideal response?

Answer 1

Whole-Person Theory
The whole-person theory is the simplest and most straightforward of the theories for dealing with permanent partial disability cases. Once it has been determined that an injured worker's capabilities have been permanently impaired to some extent, this theory is applied like a subtraction problem. What the worker can do after recuperating from the injury is determined and subtracted from what he or she could do before the accident. Factors such as age, education, and occupation are not considered.
Wage-Loss Theory
The wage-loss theory requires a determination of how much the employee could have earned had the injury not occurred. The wages actually being earned are subtracted from what could have been earned, and the employee is awarded a percentage of the difference. No consideration is given to the extent or degree of disability. The only consideration is loss of actual wages.
Loss of Wage-Earning Capacity Theory
The most complex of the theories for handling permanent partial disability cases is the loss of wage-earning capacity theory, because it is based not just on what the employee earned at the time of the accident, but also on what he or she might have earned in the future. Making such a determination is obviously a subjective undertaking. Factors considered include past job performance, education, age, gender, and advancement potential at the time of the accident, among others. Once future earning capacity has been determined, the extent to which it has been impaired is estimated, and the employee is awarded a percentage of the difference. Some states prescribe maximum amounts of compensation, and maximum periods within which it can be collected.