Remember when Simkovic and McIntire published their, uh, landmark research about the million dollar degree (n/k/a "The Economic Value of a Law Degree") during the summer months and it generated quite a bit of online discussion back in the higher-LSAT days of 2013? Remember when Simkovic himself received a grant from Access Group?
Wouldn't it look somewhat incongruous if Access Group also sponsored a report from an independent economist that indirectly undercuts Simkovic & McIntire's research?
Meet Sandy Baum, who has a PhD in economics from Columbia and studies things like higher education finance and student loan debt. Unlike Simkovic, she's not a law professor and seemingly has no skin in the "enroll-'em-up!" game. In December, Ms. Baum published a report for the Access Group Center for Research & Policy Analysis entitled "A Framework for Thinking about Law School Affordability." Note that the date of publication on SSRN is December 22.
While "Framework" is light on novel solutions (although her analysis of what would make law school a "good" investment is very solid), it gives us a bona fide third-party economics expert who even-handedly analyzed law school affordability. She wouldn't fit in here or on PrawfsBlawg, and that's a good thing.
And this is some of what she has to say, from the Conclusion section, p. 15-17:
[T]here is no guarantee that even with a positive net present value, the investment in law school will be sufficiently financially rewarding to make the sacrifices involved in paying off the debt most students accrue acceptable.
The variation in law students, in law schools, and in earnings among lawyers makes simple rules about reasonable levels of tuition and debt unrealistic....A young person seeking a career in corporate law who can enroll at Harvard Law School with a scholarship and reasonable expectations for academic success is likely to see a very high rate of return to her investment. A 30 year-old considering enrolling in a lower-tier law school knowing he is geographically constrained to staying in the Midwest should carefully monitor the net tuition he is paying and consider the very real possibility that the investment may not be worth it. His earnings are likely to be below $100,000 a year for his entire career and alternative paths might be more remunerative. Almost certainly, he should not borrow more than $100,000 to finance his education. (emphasis added)
Law schools know who their student bodies are and what their career outcomes are likely to be. The hard questions are those facing law schools whose graduates do not have access to the relatively small number of very high paying jobs—those who can expect about the median earnings for lawyers or even less. The reality is that current prices not only lead to debt levels not sustainable at typical earnings levels, but likely generate earnings premiums for many students that do not support the investment.
This isn't revolutionary, particularly for those who have paid honest attention over the last few years, but it is heterodox considering that Access Group - a cabal/civic group of law schools themselves - apparently paid for it and put its stamp on the research. While the paper is written in a neutral tone, it more or less says that paying significant tuition and living expenses at most private and expensive public non-elite law schools is foolish for most students. Given the source, it is remarkable to see something so contrary to the rhetoric still being pushed by sub-first-tier administrators.
Moreover, Baum - again, a Columbia economics PhD who studies this stuff regularly - implicitly rolls right over Simkovic & McIntire's research. She's aware of it - it's cited and discussed on page 10 - but it's impossible to reconcile her general remarks and conclusions with Simkovic & McIntire's. Her analysis admits a wide and uncertain earnings variance among graduates and the distinct possibility that a law degree "premium" will not justify the investment paid. Moreover, she admits that even a net positive economic investment may not be worth it from a psychological/emotional standpoint in terms of expectations (see p. 12-13). At times, it's difficult to not see her trying to impeach Simkovic and McIntire sub silentio by being thoroughly reasonable:
The complexity of evaluating the “affordability” of a law school education is multiplied many times by the extreme variation in prices, job opportunities, and earnings in this market. Knowing that on average, a law degree pays off means little for those for whom the payoff is below average, including the significant portion of graduates for whom it is far below average.
"Framework," p. 13. Again, this is coming from Access Group - the same organization that allegedly paid Simkovic a six-figure grant.
A naive person might think that such a paper would get as much - if not more - press play than Simkovic and McIntire's" Economic Value." Yet Baum's paper barely made a whisper in legal discussion circles, possibly because it was released during the holidays, and possibly because legal academics would rather not republish things like "[one] should not borrow more than $100,000 to finance his [legal] education" when it comes from an Access Group-sponsored paper.
All I know is that TaxProf Blog reported it on January 11. I can't find much else from the usual circles. Maybe law professors, grand philosophic quests for reason and justice aside, are more like rabid television viewers than they wish to admit, and fall for million-dollar scholarbait but can't be bothered official reports written in an objective tone.
The bottom line is that we have a report from Access Group's retained independent consultant that basically says it's likely a bad idea for most law students to enroll under present conditions, it undermines certain law school propaganda pieces, and it was published during the winter holidays and barely reported. I'm no conspiracy theorist, but I'm also not a dumbass.