Accounting for events in the back pay period

How do different economists handle life changes such as going back to school, etc. that occur in a plaintiff's life during the period covered by a back pay award? Say, for example, a person is wrongfully terminated from a job, tries hard but can not find another job. As a result the person decides to go back to graduate school. How would different economists account for the lost earnings during the back pay period?

Depending on the state and the likelihood of receiving front pay damages, the economis's decision could make a big impact on the economic damage estimate.

Option 1: Assume that the life change is the result of the wrongful termination and DO NOT add in any mitigating income earned during the transition period.

In this scenario, the economist is assuming that plaintiff was working at a job that he or she wanted to retain at the time of termination. In other words, he or she would have kept working in that job or for that company and would NOT have pursued other options (such as graduate school). If that is true, then the decision to pursue these other avenues (graduate school, retraining, adoption etc) was brought about BY the termination. As a result, economists that use this approach do not show mitigating income for the time the person has taken off to pursue these other avenues.

Option 2: Assume that the life change is the result of the wrongful termination and DO NOT add in any mitigating income earned during the transition period and SUBTRACT the out-of-pocket cost of training. In the education case, the economist would subtract the cost of items such as tuition, books, etc.

Option 3: Assume that the life change is not the result of the employment termination and simply add in any mitigating income that was earned during the time as normal.