Tuesday, February 6, 2018
Paul F. Campos (Colorado), The Extraordinary Rise and Sudden Decline of Law School Tuition: A Case Study of Veblen Effects in Higher Education, 48 Seton Hall L. Rev. 167 (2017):
This Article attempts to give a partial answer to the question of why, over a period of several decades, American law schools were able to continually raise tuition far faster than the rate of inflation. My thesis is that from at least the middle of the 1950s until the early years of the present decade, law school tuition often displayed the characteristics of a Veblen good, a good for which demand increases as price increases. I then argue that over the past few years, what I call the “law school reform movement” has made it increasingly difficult for law schools to market their credentials as Veblen goods. As a result, after more than half a century of constant increases, real law school tuition has suddenly fallen significantly.
Part II of this Article reviews the history of American law school tuition from the 1950s to the present day. Part III examines the concept of a Veblen good and looks in detail at the tuition history of one law school over a fifteenyear period to help illustrate that concept. Part IV considers how this tuition history helps explain the causal mechanisms that produce Veblen goods, especially in higher education. Part V reveals that, over the past five years or so, American law schools have moved into a new era—one featuring falling rather than rising prices—and it analyzes some possible causes of this sudden and startling reversal of a trend that has lasted more than half a century. Part VI concludes. ...
The conclusions that this Article raise produces at least as many questions as they answer. For example, to what extent does the history of law school tuition over the past 60 years throw light on the costs of American higher education in general? Will the current decline in average real law school tuition continue or accelerate? If so, how many law schools will be able to tolerate losses in tuition revenue that, at least at non-elite schools, have already reached an average of perhaps 35% over the past five years? What are the implications, for the legal profession and society as a whole, of a tuition discounting system that is becoming ever-more pervasive and intense? Note that it is now the case that around half of all law students pay either sticker tuition or something close to that, while those students whose legal educations are subsidized by the former group pay tuition that, in real dollars, is similar to tuition rates 20 or 30 years ago. Given that those paying full price are both disproportionately poorer and more likely to be members of ethnic minority groups than those they subsidize, this “reverse Robin Hood” system should trouble anyone concerned about the ways higher education can reinforce rather than break down existing class and race hierarchies.
All these questions deserve further close investigation. This initial foray into the (disappearing?) world of law school credentials as Veblen goods merely suggests how complex the political economy of law school education, and of American higher education in general, may ultimately prove to be.