Friday, July 26, 2013
The American Lawyer: Paper on Law Degree's Economic Value a Non-Sequitur, by Matt Leichter:
In their paper, Simkovic and McIntyre compare Census Bureau and National Education Longitudinal Study income data for law degree holders to the incomes of mere college graduates for the time period spanning 1996 to 2011. They calculate that law degrees add a median $32,300 in annual earnings and a median $420,000 in after-federal-income-tax lifetime earnings over college degrees. The authors conclude that these figures justify enrolling in law school, contradicting critics warning that law school is an "irrational" investment. But what really grabbed people's attention was the paper's magic, seven-digit number: A law degree's mean pretax net earnings bonus is a cool million dollars. ...
Although the criticisms offered by Mystal and others are well-founded, they miss the even more troubling problems embedded within "Economic Value": The paper's causal theory for explaining the law degree's income bonus is nonsense because it assumes law school pays off equally for non-lawyers, a notion that diminishes the relevance of the authors' findings. Even if its income calculations were applicable to the real world, they in no way call into question reformers' criticisms of legal education, so on that score the paper amounts to a non-sequitur. ...
Even if its findings were applicable to reality, academics and media outlets eagerly heralding "Economic Value" as fundamentally changing the debate over legal education will be disappointed to learn that the paper's findings support no such position. ...
Ultimately, anyone who believes "Economic Value" applies to the law school debate in any way fails to recognize that the debate is fundamentally distributional in character. It only concerns how much of the social surplus should go to law schools. One could agree with "Economic Values"'s numbers and still believe the above points are true.
Many people have pounded the drum for more longitudinal data on law graduate earnings outcomes, and "Economic Value" delivers them. Lamentably, the paper shortchanges both itself and the legal education debate by assuming that law degrees intrinsically increase earnings. Despite its detailed econometric methodology, "Economic Value" answers the questions it takes on much too broadly, and it certainly shouldn't convince anyone that there are too few law schools, that most aren't overpriced, that legal education can't benefit from substantial reforms, or that students will be able to repay their debts from their incomes.
- Michael Froomkin (Miami), Fur Flies in Debate over ‘The Economic Value of a Law Degree’
- Milan Markovic (Texas Wesleyan), Structural Shifts, BigLaw, and the Economic Value of a Law Degree
- Dan Rodriguez (Dean, Northwestern), More on the $1 Million Question: Is Law School Worth It?
Prior TaxProf Blog coverage:
- What Is the Economic Value of a Law Degree -- $1 Million? (July 17, 2013)
- More on The $1 Million Value of a Law Degree (July 18, 2013)
- NY Times, WaPo, Others Debate The $1 Million Value of a Law Degree (July 18, 2013)
- What Is the Economic Value of a Law Degree -- $1 Million or $100,000? (July 19, 2013)
- More on The $1 Million Value of a Law Degree (July 20, 2013)
- Merritt on The $1 Million Value of a Law Degree (July 21, 2013)
- Diamond on The $1 Million Value of a Law Degree (July 22, 2013)
- Tamanaha: How 'The Million Dollar Law Degree' Study Systematically Overstates Value (July 23, 2013)
- Tamanaha: How the 'Million Dollar Law Degree' Study Understates Risk (Part I) (July 24, 2013)
- Tamanaha: Why the “Million Dollar Law Degree” Study Fails (Final Post) (July 25, 2013)
- Rasmusen: Critics of The Economic Value of a Law Degree Are Making the Paper Better (July 25, 2013)
- Pasquale and Simkovic Respond to Tamanaha (July 25, 2013)
- Simkovic Responds to Tamanaha (Part 3) (July 26, 2013)
- Tamanaha: Short Term Versus Long Term Perspective (July 27, 2013)
- Harper, Diamond: The $1 Million Value of a Law Degree: Distraction, Astronomy, or Astrology? (July 28, 2013)
- Simkovic Responds to American Lawyer Op-Eds (July 29, 2013)
- Diamond Responds to Tamanaha (July 29, 2013)
- Rasmusen: The Economic Value of a Law Degree and the 'Typical' Law Student (July 29, 2013)
- Simkovic Responds to Tamanaha (Part 4) (July 30, 2013)