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In a paper published in The University of Chicago Law School's Journal of Legal Studies, Michael Simkovic, a professor at Seton Hall University School of Law, and Frank McIntyre, a professor of finance and economics at Rutgers Business School, wanted to know whether it's worth it to go to law school. Their conclusion: A law degree adds about $1 million on average to a person's lifetime earnings.
Given this horror show, is it still worth it? And how did Simkovic and McIntyre arrive at their $1 million figure?
Correcting for Biases
From the outset, Simkovic and McIntyre state what might be fairly obvious: "The economic value of a law degree turns not on whether law school graduates practice law but rather on how much more readily they find work with the law degree than they would have without and how much more they earn with the law degree than they would have without."
Part of the problem involves correcting for biases; for example, it could be that law degree holders aren't actually earning more than non-law degree holders because of their law degrees. It could be that they're earning more because the kind of person who would go to law school would be more successful whether or not she had a law degree.
After controlling for a number of factors, including undergraduate degree, as well as the number of lawyers, Simkovic and McIntyre do indeed conclude that a law degree will increase a person's lifetime earnings by about $1 million, on average (and before tax) compared to someone who didn't get a law degree.
The authors caution that they're not making individualized judgments, just general ones. Going to an unranked law school in a low wage market might be a worse idea than stopping at a bachelor's degree, but on average, nationwide, it's a better idea to go to law school than to stop at a bachelor's degree.
But even if your earnings are in the bottom 25th percentile, you're still doing well: The lifetime value of your degree is about $395,000 if you're a man and $554,000 if you're a woman. Of course, if you plan on becoming a BigLaw partner, you'll do better still, with about $1.5 million in the top 25th percentile for men and $1.4 million for women.
The good news is that, counter to what you've heard, an increased number of lawyers apparently doesn't have much of an effect on the legal market. According to the study, even after the recession, "law degree holders continued to fare better in the recent downturn than bachelor's degree holders without advanced degrees."
Even better, the researchers estimate that "recent law school graduates' advantage over similar bachelor's degree holders is as large or larger than that of previous cohorts," though they're unwilling to formally draw that conclusion due to the small sample size and accompanying large margins of error.
Editor's Note, October 28, 2015: This post was first published in November 2014. It has since been updated.