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Peak law school?

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One of the curiosities of current debates about tuition increases, both at American law schools and in higher education in general, is that there’s very little if any understanding of how much tuition rose in real terms in the 1950s and 1960s. In the case of law schools, average private law school tuition actually went up faster, in percentage terms, than it has over the past 30 years. Of course the increases in recent decades have been from a radically higher baseline:

Private law school tuition 2014

I’ve only collected data on public law school resident tuition since the mid-1970s, but average tuition levels were still barely more than nominal at that time, and remained so well into the 1980s:

Public law school tuition 2014

Notes:

(1) The very rapid rise of private law school tuition in the 1950s and 1960s took place in the context of steadily rising median incomes during these years. Since the 1970s median incomes have remained practically flat.

(2) Any criticism of the cost structure of higher education is sure to produce a bunch of nonsense about “Baumol’s cost disease” from defenders of the status quo. In fact per capita faculty compensation has fallen sharply since the 1970s. For idiosyncratic reasons this hasn’t been true for law schools in particular, but it would be perfectly possible to cut entry level law professor compensation in half with little or no loss of quality. As anyone who has any experience with the hiring market recently is well aware, huge numbers of superbly qualified job candidates, both in traditional legal academic and more pragmatic terms, are finding it impossible to get a job.

(3) The current cost structure of legal education features fantastic levels of successful rent-seeking. If we measure the pedagogic quality of law school by the extent to which it prepares people to become licensed attorneys, there is no evidence that, over the past 40 years, the quadrupling of tuition at private law schools, and seven-fold increase in resident tuition at public schools has produced any quality improvements whatsoever. This is illustrated by the fact that scores on the Multi-State Bar Exam — a scaled and equated test, meaning the scores from which account for changes in the ability of test takers — are actually lower now than they have been at almost any time in the past 40 years.

(4) Econ 101 says that, all things being equal, firms that radically raise prices without commensurate improvements in quality will be immediately undercut by competitors, who will seize market share via lower prices. Econ 201, 301 etc., points out that this model of economic behavior is way too simple. In areas such as higher education, information gaps, Veblen effects, and the like cause potential tuition payers to treat price as a straightforward proxy for quality. This helps explain why every single private law school in the country is now charging vastly more in constant dollars than Harvard and Yale were charging 30 years ago, even though it seems safe to assume that Harvard and Yale Law Schools were providing acceptable-quality legal educations at that time.

(5) All this aside, there is some evidence that Peak Law School is now in the historical rear view mirror. Sticker tuition increased by “only” 5% in constant dollars between 2010 and 2014, while at the same time the percentage of students paying full freight at private law schools plummeted from 48% to 36%. This suggests that, over the past five years, effective per capita tuition has actually declined. Since overall JD enrollment has declined by 23% over this time, law schools on average are pulling in around 25% less in tuition than they were in 2010. (On average is a deceptive term here, as elite law schools are pulling in more tuition than ever, while a school like Thomas Cooley, which has seen enrollment fall 65% over the past five years, is probably getting less than half as much out of its student loan conduits as it was in 2010). Once again, if something cannot go on forever, it will stop.

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  • bernard

    In fact per capita faculty compensation has fallen sharply since the 1970s.

    Per what capita? From a student point of view the issue is per student, not per faculty member.

    This is similar to the problem with using student/faculty ratios or average class sizes as a measure of quality. Adding faculty and reducing teaching loads raises the ratio, but doesn’t help the students at all. Similarly, “average class size” should be calculated across students, not classes.

    To illustrate, suppose you have two classes, each with 50 students. Average class size is 50. Now change that to one class with 90 students and another with 10. That’s still two classes, with an average size of fifty when averaged across classes.

    But the students have an average class size of 82 (90% X 90 plus 10% X 10) not 50. Isn’t that a better measure of quality?

    • Srsly Dad Y

      We were told there would be no math.

    • DAS

      Good point about per what capita.

      Our university, like many organizations, uses a grid to determine faculty pay: you have pay ranges with a certain number of steps within each range*. If you look at the numbers in the grid, the COLAs have not always actually reflected the full changes in cost of living, the university now requires us to pay money toward our health insurance, step raises are sometimes skipped and range adjustments are increasingly difficult to obtain. So (for example) a full professor with 15 years of service at the university, having been hired after already publishing 5 papers is making less, in real dollars, than an equivalently experienced full professor would have been making 20 years ago.

      However, when you look at things from the student point of view (or in terms of total faculty salary expenses), things are different … because we have more faculty at our university (both total and per student) than we used to have.

      There are many things driving this increase in faculty numbers. Part of it is new subjects require new faculty to teach them, while old material is still important and requires specialists — for example, we now have a proteomics specialist in the bio department and a nanochemist in the chemistry department, but that doesn’t mean the bio department can just replace one of its molecular biologists with the proteomics person of the chemistry department can replace its inorganic person with the nanochemist. Also, we teach more sections of each course, in part because students have increased work loads, which means we have to have more variety of times at which each course is offered, so students have more flexibility in scheduling: this forms a vicious cycle — students work more, which means we need to have more sections, which increases the cost of college, which means students work even more. Another issue (in things such as first year writing classes) is that students are poorer prepared for college level work and hence need more attention to bring them up to speed, which they receive via having smaller classes.

      Another driver of increasing faculty rosters is the nature of courses students take — which itself is driven by external factors such as what is on standardized tests. For instance, the MCAT requires more biochemistry than it used to. So more students are taking biochemistry. Which means I am teaching a double section of biochemistry (and two biochemistry labs) rather than teaching a section of biochemistry and a section of nursing chemistry like I did last fall. Since nursing chemistry is a larger course, I am actually teaching fewer students than I did last fall, which means that the per student cost of my salary is increasing (in spite of not having a pay raise due to budget/contract issues). OTOH, this increase is, in a sense, justified because teaching biochemistry (especially the lab) is seriously hard work … so I actually am working harder this fall than last fall, even though I am teaching fewer students. The tl;dr here is that when students demand (often because of demands placed on students by standardized exams) courses that require more work to teach, per student capita faculty expenses go up!

      *Where you start out depends on how experienced, etc., you are when you are hired (and is subject to some negotiation); every other year you get bumped up a step (except when budget conditions result in step raises not being given), each time you are promoted, you get bumped up two ranges and once you reach the end of a range, you can apply for a range adjustment. The entire chart gets a COLA each year

      • Linnaeus

        how experienced, etc., you are

        Are you experienced?

        • DAS

          I came in with 2 years of post-doc and a 5 first author, peer reviewed publications under my belt, so I started out at a higher step and higher range than a new faculty member in biology/chemistry with no post-doc experience and only 2 publications.

          Of course the other factor coming into play is that 20 years ago, biologists and chemists (for example) had more alternate employment options, so to get a first year faculty member at a second tier state institution who had 2 years of post-doc and 5 first author papers would be quite impressive, so that faculty member would start out in a reasonably high pay range. When I got hired (back in 2008), those qualifications were pretty much what a typical hire in the biology/chemistry department would have at an institution such as ours. Nowadays, someone with the publication record and experience that I had coming into my current position couldn’t even get a tenure-track position in department as we would consider that person under-qualified for the job.

          • Linnaeus

            I was making a not-very-clear Jimi Hendrix reference. Sorry.

            That said, what you write here seems to track with my observations in a previous lifetime when I was working in the sciences.

            • DAS

              Probably my fault the reference wasn’t clear to me. I’m not thinking fully today as most of my brain capacity is being devoted to grading finals as well as grading a backlog of lab reports.

              • Srsly Dad Y

                Let Jimi take over.

                • Hogan

                  He’s been to Electric Ladyland.

                • toberdog

                  Get on with it, Baby! Yeah!

              • rea

                I’m the one who’s gotta to pay for law school when it’s time for me to pay for law school.

                So let me live my life the way I want to.

                Yeah…
                Grift on brother,

              • Tyto

                So, you’re not necessarily stoned, but . . . beautiful?

            • dp

              You had to give it away before I could post, “Have you ever been experienced?”

  • JCougar

    We may be past peak tuition, but we’re certainly not past peak jaw-dropping-ridiculousness:

    http://www.cooley.edu/prospective/bachelors.html

    • spearmint66

      Oh my.

      Traditionally law students have demonstrated metabolic activity. To be admitted as a decaying corpse, WMU-Cooley requires a certificate of past respiration, as well as a letter from a religious authority declaring that candidate might reanimate, given the doctrine of what the hell, miracles happen.

      • dp

        Hey, you can save 2 years of undergrad debt!

  • DAS

    In fact per capita faculty compensation has fallen sharply since the 1970s.

    Perhaps its more meaningful to consider the lifestyle a faculty salary supports than to even look at inflation adjusted earnings. OTOH, it’s also a lot more complicated. For example, a household supported by a single full time faculty salary (perhaps supplemented by a spouse with a part time job) nowadays will have far better quality food than in the 1970s and be enriched by technology that simply didn’t exist back then. To the extent that my salary enables me to buy better food and better technology than the salary of an equivalently experienced faculty member could in the 1970s, faculty compensation has actually risen, even if the salary in “real dollars” has fallen.

    OTOH, a “DAS equivalent” faculty member in the 1970s could afford to purchase a very nice house in a nice neighborhood with a good school district that was also not too far from where said faculty member taught. If I want to ease my commute, however, the only way I can afford housing anywhere near my workplace is to either (A) live in a high crime area with poor quality schools, (B) live in a condo (other than shortening my commute, all the disadvantages of living in the city, with none of the advantages) or (C) live in a flood zone. So to the extent that the quality of housing I can afford on my salary has gone down relative to the housing an equivalently experienced faculty member could afford in the 1970s, faculty compensation has gone way down.

    • bernard

      DAS,

      These sorts of variations are why we use an index of inflation,

  • Srsly Dad Y

    #Yesbut

    As we saw in the thread a few months back about living the punk life in NYC in the 1970s (at least that’s how I remember the thread), the tremendous inflation in housing costs in metropolitan areas since the 1980s always swamps all other factors (other than maybe tuition) in real-income comparisons between then and now, for everybody. No city dwellers below the .01% in income can live where the people who did their jobs in the 70s lived. So it’s not an especially good gauge of the real value of academic pay.

    EDIT: started as a reply to DAS, I thought.

  • Tracy Lightcap

    I hate to be picky here, but the Y axis on the graphs should be a common log scale. Then you could read the lines as percentage increases directly.

    Just taught methods this semester and I can’t get this kind of thing off my mind.

  • rea

    Humorously, the ad I get on the sidebar is for WMU-Cooley Law School

    • Tyto

      You know you want that LLM…

      • rea

        I had not known that they offered an LLM program–online, yet.

  • LawDdaw
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