Thursday, November 8, 2018
Samuel P. Engel, The Economics of Law School: Employment Prospects and Market Inefficiencies, 87 Miss. L.J. 501 (2018):
Using recent data from the American Bar Association and the National Association for Law Placement, as well as proprietary data and modeling, this Article constructs an economic model that indicates that, in many situations, there is remarkably a negative correlation between law school prestige and economic outcome, after controlling for LSAT scores. The Article utilizes six main variables in the construction of the model: (1) cost of tuition; (2) financial aid packages; (3) cost of living; (4) LSAT scores; (5) type of legal employment secured; and (6) the relationship between LSAT score and law school performance. The resulting data provides a detailed breakdown regarding the economic outcomes of attending a specific law school, after adjusting for important factors such as the quality of competition, the cost of living in nearby markets, and the cost of attendance. The Article also briefly discusses the secondary effects and characteristics of this market inefficiency, including its tendency to: (1) resist natural correction by the legal market; (2) accelerate grade inflation; (3) constrain upward mobility, thereby limiting diversity; and (4) reduce the number and quality of law students.
Part I of this Article provides a brief introduction. Part II provides an account of the methodology and summarizes the data utilized. Part III applies the economic model to a half-dozen hypothetical law school applicants to illustrate the existing market inefficiency. Part IV briefly discusses the secondary effects and characteristics of the market inefficiency. And Part V provides a concise summary of this Article's results and their impact. The Appendices provide extensive quantitative information related to this Article's findings, and also provide a more detailed description of the methodology employed.