Following up on my previous posts:
American Lawyer: 'Million Dollar Degree' Authors Answer Harper, Leichter, by Michael Simkovic & Frank McIntyre:
For several years journalists at leading publications have reported that
enrolling in law school is a bad investment for many and perhaps even
most prospective students because of declining starting salaries in the
legal industry and data related to the employment status of law grads
nine months after graduation.
In our paper, The Economic Value of a Law Degree,
we use earnings data from the U.S. Census to investigate the increase
in earnings associated with a law degree compared to a bachelor’s
degree. Our results suggest that the press mistook a generally weak
labor market and high unemployment among the young for a law-specific
problem. We find that at current tuition levels and student loan
interest rates, the median and even 25th percentile earnings premiums
confer advantages that exceed the cost of a law degree by a wide margin.
After controlling for observable ability sorting, we find that a law
degree is associated with a 60 percent median increase in monthly
The mean annual earnings premium of a law degree is
approximately $53,300 in 2012 dollars. Even toward the lower end, the
annual premium is still $17,300 over a bachelor’s degree. For most law
school graduates, the net present value of a law degree over a lifetime
typically exceeds its cost by hundreds of thousands of dollars.
In a column published on July 25, 2013, Am Law Daily contributor Matt Leichter
repeated many misrepresentations of our research that originally
appeared on Above the Law—even after Above the Law posted corrections to
its article and after we refuted many of these misrepresentations. A second Am Law Daily contributor, Steven Harper, made many of the same mistakes in a column published the following day, and threw in a few disparaging remarks to boot. We’ve discussed many of these errors in a separate piece, but the clearest refutation would be to simply read the paper. ...
Everyone will experience
recessions during their lifetimes. The more important question is if the
law degree premium will decline, increase, or remain the same over
time. We know from the data that there has not been much of a long-term
trend in the 16 years from 1996 to 2011, though the premium does
fluctuate from year to year. Some have suggested that the last few years
saw an unprecedented collapse in the employment market for law degree
holders. And indeed, the broader U.S. labor market has seen declines in
recent years. However, in relative terms, the law degree earnings
premium, which incorporates unemployment risk, appears to be close to
average. That is, many people are suffering, but law degree holders have
maintained their relative advantage.
... What does all this say
about law school reform? On the one hand, untested reforms should not be
rushed through primarily based on a sense of desperation or crisis, or a
belief that changes couldn’t possibly make things any worse. On the
other hand, the high returns to law school do not suggest that legal
education can’t be improved—some reforms may be beneficial, and should
be considered on their merits. Our preference, as always, would be to
test proffered theories empirically as best as possible and we look
forward to future work that does.
Update: Harper and Leichter respond: