Paul L. Caron

Tuesday, July 30, 2013

Campos on The Economic Value of a Law Degree: The Problem With Back in the Day

Paul Campos (Colorado), The Problem With Back in the Day:

I keep getting emails from people regarding the much-discussed Simkovic/McIntyre paper, so I thought it would be worth reiterating a few basic points: ...

(1) Over the time period covered by the authors’ study, their data indicate that earnings for all law degree holders have remained flat, while the cost of law school has risen sharply. This means that, per their analysis, the value of a law degree has declined significantly in absolute terms during the time period covered by their study, even if one assumes that recent graduates will not suffer any decline in their career earnings relative to older graduates (This latter assumption, again, is simply a methodological axiom the authors adopt, rather than a conclusion supported by any data).

(2) Recent law graduates have in fact suffered a sharp decline in their earnings at the beginning of their careers, relative to the initial career earnings of older law graduates.

(3) Law schools continue to graduate two JD holders for every available legal job.

So law students are paying vastly higher prices to get much-lower paying jobs, assuming they get jobs at all (19% of the class of 2012 did not have reported employment of any kind nine months after graduation, and only slightly more than half the class has a legal job, loosely defined).

In response to these grim facts, Simkovic and McIntyre enhance their data with the methodological magic of synthetic work-life earnings, thereby suggesting strongly that, back in the day, law school was quite a bargain.

But the problem with back in the day is that it was back in the day.

Prior TaxProf Blog coverage:

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Michael Livingston: students are seeking a "return" on their degrees because their degrees cost a lot of money, on really bad terms (nondischargeable loans, relatively high interest rates, etc.). Good luck to you (at Rutgers?) running your law school without students who care about a "return" on their degrees. Looks like you teach/have taught tax, business planning, etc., so this idea that people want to get something for their money is surely not new to you. Your comment isn't naive; it's really nonsensical.

Posted by: Say what now? | Jul 30, 2013 8:12:15 PM

This is a good argument that the value of a JD has declined in relative terms, but not necessarily that it is a bad idea in absolute terms. I continue to believe, no doubt naively, that law schools would be better off with more students who really cared about law and fewer who were seeking a "return" on their degree. The latter should perhaps consider business school, which is a still worse investment (see related story), but would share their superficial values.

Posted by: michael livingston | Jul 30, 2013 2:34:46 PM