Search the Lounge

Categories

« Festschrift In Honor Of Bill Turnier | Main | Call for Papers »

April 17, 2015

Comments

Feed You can follow this conversation by subscribing to the comment feed for this post.

[M][@][c][K]

Derek and Get a Life:

I think the issue is the problem with S&M that JoJo alluded to.

At the heart of the S&M analysis is the comparison of two past cohorts - those who graduated law school pre-2008 (and enrolled therefore pre-2005) and graduates of colleges with a BA only, i.e., BA holders that did not go on to graduate school. S&M then compare these groups quartile by quartile, i.e., they compare the lowest earning 25% of law graduates with the lowest 25% of BA holders, the 50% with the 50% and so on.

The basic difficulty with this approach is that it fails to take account of the selectivity of most law schools - especially pre-2008. To put it pretty simply, if you were in a lower quartile of your BA class, barring a sky-high LSAT score (and even with one) you were not going to law school, or probably any graduate school at all. In fact, pretty uniformly law students were in the upper quartile of this BA classes (if not upper 5-15%) in terms of uGPA and tended to come from undergraduate schools that were themselves highly selective. Inherently law schools were also picking students that were more able, had a better work ethic, studied harder, etc.

This raises one of the major criticisms of S&M - that they should have compared equivalent BA students to those who could progress to graduate school in general, and law school in particular - i.e., compare the earnings of the 50% or 25% line of BA holders with the bottom 25% of law graduates and so on. When I read their study (when it came out) that was the weakness that struck me immediately - S&M were comparing the least successful and probably able BA holders with a group selected from the better performers as undergraduates (the JD holders.)

To make S&M study credible it would need to do that comparison - and incidentally the law schools admissions council has the data on uGPA and LSAT scores going back decades.

Michael Risch

M-k -

I think your criticism hits closer to the mark. It seems like the comparison should be more of a matched outcome, though Simkovic's followup blog posts implies that by major, at least, there are still premiums.

But that said, I'm still skeptical of that criticism. There have always been plenty of law schools that would take bottom quartile folks, including many unaccredited law schools, for example, in California. Those JDs are in the study. Indeed, given relaxing selectivity today, there is an argument that the bottom quartile of BAs might do _better_ now, because they can get into fancier law schools than they used to (or get into them at all, as you note).

I think this is a very complex question. I agree that the S&M study doesn't answer all of the concerns, but I also think it's not nearly as weak as detractors think.

anon

The relevant comparison is to graduates of other professional graduate schools, who have made a like investment of time and money.

Comparing law graduates to undergraduates is sort of ridiculous in every sense. First,, even if S&M were to prove that law grads do slightly better financially over an entire career (PLEASE, read their many assumptions relevant to this assessment and their ACTUAL conclusion, instead of relying on the specious "IM premium canard") their answer isn't particularly surprising or illuminating.

Sort of like postulating that if I am intellectually capable of admission to law school (as others have pointed out), and willing to invest 200,000 or more and three years of my time, I might make, over an exaggerated and unrealistic working life 300,000 more than I would otherwise have made. Whoopie!

All S&M can prove is that applying crass and bogus "economics" to "value" a law degree demeans law school and demeans the practice of law. They are more like salesmen of stocks and bonds and, as such, to be ignored by educators interested in improving legal education.

A case in point. According to S (on another blog) a chart helps us to understand the "value" of a law degree vis a vis other graduate degrees. In 2009, this chart informs us, Law ranked fourth, behind medicine/dentistry, engineering, and "computer" (see chart posted by the one and only "labor economist" worth paying attention to in the United States on the other blog; the one who has slayed every critic and remained unimpeached on any point).

Unfortunately however, like every other utterance, the footnotes and assumptions and tweaks are all we need to know: "Illustrative only. Further research needed with controls, propensity and suitability of different degrees, opportunity costs, direct costs, additional historical data, etc."

Yes, indeed. In other words, glance at the chart, take away a talking point that lacks, admittedly, reliability.

Folks, read the footnotes and the assumptions and the tweaks and the massages and all the rest before you cite this work of "labor economics" (said as loosely as possible in this context) and argue endlessly about what it all means.

It means nothing. THe law will go on: it has to. And law schools will continue to exist. THe issue is reform, not commodification by this sort of rubbish.

Barry

Michael: "Sure, JD holders work more hours. Maybe THAT'S why they earn more. But if that's all it takes to have an earnings premium, then why don't we see bachelors candidates working more? There are a few reasons I can think of:"


You look at longer hours and higher salaries, don't notice that things are also structurally different.

Barry

Deborah Merritt: "I think many of us in legal education realized that we were marketing more sharply than we should have been before 2010, and that some changes were appropriate"

Where 'marketing more sharply' meant 'quite deliberately choosing one subset of grads for employment percentages, and a smaller subset of grads for salary data, because using the same sets would have led to lousy numbers'. In many cases, without saying so.


That is fraud, pure and simple. A judge said otherwise, but OTOH very few Wall St CEO's have been sent to prison.

Anybody who's aware of such things should assume that law school statistics are simply not trustworthy, that they represent a ceiling. Anybody who's aware of such things should advise people accordingly.

Barry

Michael Risch: "But that said, I'm still skeptical of that criticism. There have always been plenty of law schools that would take bottom quartile folks, including many unaccredited law schools, for example, in California. Those JDs are in the study."

Poor logic. The admissions standards have been dropping like a rock; **more* law schools are admitting anybody who qualifies for a student loan.

'More' has a meaning.

Barry

Anon: "Also, to the extent someone makes the argument that outcomes must be optimal since they were made rationally and with full information, let's not forget that law school employment numbers were being massaged to give a rosier picture than actually the case. Things are different now but during the time period at issue in the study."

Yes. The schools were putting out a very biased picture, with nobody in legal academia pointing this out until very recently, and nobody getting their message much.

In addition, college career centers were and are full of law school propaganda, with no counter information.

And back in the pre-internet day, it was very, very hard to find enough data to form a picture. Somebody who had family connections in law, and who talked with several lawyers before entering law school was likely in the top 90% of the population.

Derek Tokaz

Michael,

I think you've completely missed the point. My criticism is that this type of analysis treats the JD as a passive earnings premium. If you compare a typical BA holder working a typical BA job, to a JD holder working the same typical BA job, you're not likely to see much of a difference in their pay. (I happen to know that I get paid the exact same as my colleagues who don't have a JD.)

You don't earn more for doing the same work, you earn more for doing very different work. And this becomes very important when that different work is in many ways worse.

Barry

anon: "Sort of like postulating that if I am intellectually capable of admission to law school (as others have pointed out), and willing to invest 200,000 or more and three years of my time, I might make, over an exaggerated and unrealistic working life 300,000 more than I would otherwise have made. Whoopie!"

I'll repeat, but for a substantial chunk of the time range covered, and for the group most likely to be pulling in higher salaries, getting into law school was not easy. Most law schools had high admissions standards.

Barry

Anon: "Comparing law graduates to undergraduates is sort of ridiculous in every sense. "

I'd like to see S and M go to the annual Northwester Law School workshop on causal inference and present those results, and I'd really, really love it if they did it while Rubin was there.

Anon

At every turn Tokaz ignores the actual results of S&M. Why? Is he an idiot? Or is he being disingenuous? I used to assume the latter, but now I am not so sure.

S&M never say that a JD holder and a BA holder will earn different pay in the same job at the same time. They say that over a lifetime the JD holder will (at most points in the distribution) earn a premium relative to the BA holder. That Tokaz chooses - apparently - to pay himself the same as his BA employees is irrelevant to this result. It's nice to know he runs LST like a socialist coop but it is not consistent with capitalist reality.

And notice now he has backed off his claim about hours. Because it made no sense. See above result.

The other comments here repeat criticisms that are clearly addressed in the paper and explained numerous times by S in his commentaries at Brian Leiter. For example the claim that S&M do not account for other possible graduate degrees. Please. They make clear that BAs who opt for law school generally are not capable of earning STEM post-graduate degrees. Perhaps they could get an MBA. And that might equate to the same NPV as a JD. But that is not the argument. The argument - and data - assess what a BA who wants to consider law school should think about the financial impact of the choice.

One has to conclude that either these repeated attacks are the result of laziness or inability to comprehend these simple explanations or are themselves an attempt to mislead - surprising since this crowd puts such a premium on the canard that law schools mislead.

Again, I blame the editors of FL for allowing this monumental waste of space and time. The decline of FL as a reputable site continues.

At the end of the day S&M is about the value of a JD relative to a BA. It is consistent with the entire literature in human capital going back decades. It should not be controversial and in fact among the very reputable labor economists who reviewed it it was decidedly not controversial. It is only controversial here at the flat earth society that FL has become.

Read the paper

In determining the earnings premium, Simkovic & McIntyre sought to control for ability and hours worked. Perhaps those controls were not perfect. But from the comments above, it seems quite clear that folks haven't read or understood the paper and are largely relying on second-hand critiques that the authors have rebutted.

Derek Tokaz

Anon,

While S&M don't say "You'll earn more for the same job," they do describe the premium as "The Economic Value of a Law Degree." It would be far more appropriate to say "the economic value of a law degree plus the graduates' increased effort." You cannot isolate the value of the degree from the difference in work the JD holder is doing. If you could, then there would be a difference between BA and JD holders doing the same job, which of course there typically isn't.

Anon

DT: From the paper you refuse to read or are incapable of understanding -

Table 3 reports several regressions that substitute alternate dependent
variables for log earnings. We compute the hourly wage as total annual
earnings divided by total hours worked and then use the log of this as
our dependent variable. The raw gap of .56, somewhat smaller than the
original earnings gap, is because law degree holders work more hours
than those whose highest degree is a bachelor’s. Adding controls reduces
the law degree premium slightly, to .50, which translates into a 65 percent
wage premium. In other words, a law degree is associated with
both more work hours and higher wages per hour, and most of the
increase in earnings is due to increased wages per hour.

In other words hours worked does not eliminate the (65%!) premium. Do you get it now?

anon

S&M indeed compared the value of a JD with the value of a BA.

As stated above, this is a sort of ridiculous effort. Those capable of investing 200,000 or more, three years and their substantial intellectual ability (less so these days, to be sure) tend to earn more over a 40 year hypothetical period than those who didn't? Wow. Who knew?

The comment above that "For example the claim that S&M do not account for other possible graduate degrees. Please. They make clear that BAs who opt for law school generally are not capable of earning STEM post-graduate degrees." This observation has nothing to do with the chart that S posted recently "showing" the more relevant comparison (apparently, not sharing Anon's view of his students' abilities) of the Law degree with other post graduate degrees.

And, while we are discussing "premiums" and "values" let's consider S&M's conclusion about the latter:

"For most law school graduates, the benefits of a law degree exceed its cost by a large margin."

REad that sentence carefully, and then ask yourself whether the endless debate about this rubbish has anything to do with the improvement of legal education.

It is clear to this reader that some in the law academy felt stung deeply by the drubbing they received concerning marketing and claims about the "value" of a legal education (again, misguided as this debate is with respect to the meaning of the word "value"). Clearly bested, these proponents of the "we can do no wrong" school have latched onto anyone who will say they were correct all along.

Enter the pseudo labor economics to "prove" that the PREMIUM of a law school education will be 1M (in other words, to the casual reader, go to law school and you will make 1M more than if you didn't!" which is, of course, just another one of those problematic claims that got this bunch in so much trouble in the first place.

Keep it up and keep insulting and name calling and all the rest those who dare to point out the obvious flaws in all this, and the result will be as it has been: disgust and declines in the quality and quantity of applicants to law school. Turn the page, and start in earnest to think about more relevant topics - such as improving legal education - and turn the ship on a different and better course.

[M][@][c][K]

Read the paper:

I have in fact read the paper - I read it the day it became available.

I would add that many in my class could have done STEM post grad - but that was 20+ years ago.

There are two issues with S&M's analysis. First the issue I raised - are you comparing those who went to law school with those who had the option to do so but declined to take it.

The second issue is the comparison of pre-2008 JD recipients - at least in the first paper - en masse - which fails to take account of broad structural changes in the legal market and legal employment over the last 3 decades.

Derek Tokaz

Anon,

I've referenced that section of the paper in earlier comments. I am very much aware of it.

What you (and S&M) have failed to consider is the quality of those hours worked.

If ditch digging paid 65% more than lawn mowing, we wouldn't look at that and say "Wow, look at the economic value of a shovel!" We would instead, and quite rightly I think, say "Wow, ditch digging must be some pretty hard, miserable work." The earnings premium doesn't derive solely form your ownership of a shovel; it comes primarily from the increased effort the job requires. The same goes for a very significant portion of JD holders. Much of the "economic value of a law degree" comes not from the degree, but from the increased effort put in by the JD holder.

Anon

Ok, in the interest of Bernie's call for more light than heat let's stick with your analogies, DT.

Yes, but the ditch digger learned how to use the shovel - and earned the right (i.e., license) - to use the shovel by going do ditch digging school. Whereas anyone with a BA can mow lawns.

Perhaps you are no clear on the concept of an explanatory variable. If the controls are done well (and the senior labor economists who peer reviewed the paper conceded they were) then it is possible to isolate such a variable. In this case, a JD. If you go through life with just a BA you will be presented with a more financially limited set of possibilities than if you earn a JD.

If you have a problem with the controls then please enlighten us as well as the editors of the Journal of Legal Studies.

Observer

"At the end of the day S&M is about the value of a JD relative to a BA. It is consistent with the entire literature in human capital going back decades. It should not be controversial and in fact among the very reputable labor economists who reviewed it it was decidedly not controversial. It is only controversial here at the flat earth society that FL has become."

Which raises an interesting question.

If S&M are correct, and a JD degree provides a substantial earnings premium over a mere BA degree, and if that premium is unaffected by exactly when you choose to go to law school, why has the number of applications to law school collapsed, and why has there been an associated collapse in the average quality of applicants to law school?

Is it hysteria? Mass psychosis?

Surely Campos doesn't have that much power.

There is obviously another interesting paper to be written - which is to answer why an increasing number of people with BA's (particularly higher-quality students with BA's) are irrationally passing up the opportunity to earn the substantial earnings premiums associated with a JD.

anon

Observer

Read Anon's comments.

There is your explanatory variable.

It isn't irrational to wish to disassociate oneself from the perception of the law school establishment thus created.

Critics of that establishment wouldn't have caused the decline in applicants if their response to justified complaints had been a hearty mea culpa followed by tangible reforms to better meet the needs of today for reforms in legal education, and to make the practice of law and legal system a better and more responsive experience for both practitioners and for the society they serve.

Instead, we get the rubbish that passes as a "debate" about the impressions of a summary of a summary that someone tossed off in a comment in a blog concerning a highly nuanced and carefully limited conclusion about a fact that was already obvious to almost everyone.

The comments to this entry are closed.

StatCounter

  • StatCounter
Blog powered by Typepad