In The Economic Value of a Law Degree,
Frank McIntyre and I estimate the increase in annual and lifetime earnings that
is attributable to a law degree. To do
so, we compare those with law degrees to similar individuals with less
Because those who matriculate at law schools may be
different from the average bachelor’s degree holder, we compare law degree
holders to a group of similar
bachelor’s degree holders.
There is a misperception—apparently started by Brian
Tamanaha (here and here) and repeated
by others—that we simply compare law degree holders to all
bachelor’s degree holders, or that we compare the 25th percentile of law
degree holders to the 25th percentile of all bachelor’s degree holders.
This is not true.
At a high level, what we essentially did was to create two
subgroups of bachelor’s degree holders—all bachelor’s degree holders, and a
subset of bachelor’s degree holders who look like the law degree holders with
respect to many observable characteristics that predict earnings—demographics,
academic achievement, parental socio-economic status, measures of motivation
and values. It is this second group of
bachelor’s degree holders that we compare to the law degree holders. ...
These controls bring down our earnings premium estimates by
around 10 percent at the mean and around 8 percent at the 25th percentile.
In other words, the data and statistical techniques that we
use suggest that the kinds of people who go to law school would probably earn
about 10 percent more than the average bachelor’s degree holder even if they
hadn’t gone to law school. But the law
school earnings premium is much greater than that, and the earnings premiums we
report are after controls for ability
[W]e found very little to suggest that law graduates’
above average undergraduate academic performance translates into higher earnings other
than what we had already accounted for.
This may be surprising to people for two reasons. First, law degree holder undergraduate
academic performance is better but not fantastically better than the typical BA. Second, that above average performance does
not actually translate into much of a boost to earnings. It
turns out higher undergraduate grades, for example, do not show a strong
correlation with later earnings. We find
that this is especially true, by the way, in the majors preferred by law
students in the humanities and social sciences.
... A very large
fraction of law degree holders do not end up practicing law. For some, this is a disappointment and for
others it is a preferred outcome. We
include all these people in our estimates of the value of a law degree. That is because the question we are
interested in answering is the value of the law degree, not the earnings of the
subset of individuals who practice law.
Controlling for occupation would have been methodologically improper
because occupation is an outcome variable, not a pretreatment covariate.
Thanks and Goodbye
It’s been a
fun couple of weeks. We’d like to thank
Brian Leiter, Brian Tamanaha, and others for the wonderful opportunity they’ve
given us to explain our research to a wider audience. And I’d like to thank Frank McIntyre for his
contributions to this post and previous posts. This will hopefully be our last post about The
Economic Value of a Law Degree, at least for a little while.