The Writer Discusses a Statistic about the Economic Value of a Law Degree

Now back to what I said at the beginning: managers – in this case, managers are aspiring law students who “manage” their own human capital – should accept a project with positive capital value. In other words, even according to Campos` analysis, a student would have to conclude that law school makes sense. The actual net dollar amount above present value is irrelevant as long as it is positive. Simkovic and McIntyre estimate “the lifetime median value of a law degree before tax at about $1,000,000.” The authors estimate that the median after-tax value of a law school is $420,000 (or was what they treat as the same thing). Assuming an active life of 42 years, they actually estimate that a law degree for the median graduate generates an annual income premium of $10,000 (in 2012 dollars) that is higher than what an otherwise similar college graduate who chooses not to attend law school could earn in his or her lifetime. That still seems like a very good result, even if it doesn`t seem as spectacular as the million-dollar claim. As such, it is a statistical term to describe the cost of reducing the average number of deaths of a single person. It is an important topic in a variety of disciplines, including economics, healthcare, adoption, political economy, insurance, workplace safety, environmental impact assessment, and globalization. [2] Simkovic and McIntyre offer the necessary caveats in their analysis, but potential law students (and their parents) are unlikely to focus on them. For example, for young female graduates who work in jobs that do not require a JD, they “suggest” causality between graduation and lifetime income bonuses, but admit that they cannot prove it.

(page 25) Incorrect: I often write about BLS job projections, so these statements have raised eyebrows because BLS has highlighted them in its Career Outlook Handbook (OOH) for many years. The OOH speaks quite clearly to a non-academic audience about the opportunity of different careers, and nowhere does it warn readers not to rely on 10-year projections, for example on the FAQ page. It`s not to say it fosters blind trust, but it would take a substantial effort to convince me that BLS is putting so much effort into a project it doesn`t really believe in. “What does all this say about law school reform? On the one hand, untested reforms should not be implemented primarily because of a sense of hopelessness or crisis, or the belief that change could not make things worse. On the other hand, high yields at law school do not indicate that legal education cannot be improved – some reforms can be beneficial and should be considered on their merits. As always, we would prefer to test the theories proposed empirically as much as possible, and we look forward to future work that does. This is not an exhaustive response to “Economic Value” and subsequent comments by its authors; It could go on forever, but I`d really like to stop there. While their work has indirectly taught me a great deal about signal theory and the factors that influence the remuneration of a profession, I hope Simkovic and McIntyre will leave legal training to more diligent researchers.

It would be a tragedy if someone applied to law school on the basis of “economic value” and shame on anyone who uses the paper to get someone to do so. But one of the reasons I`ve expanded this topic much longer than it deserves is because I have a degree in social sciences, and “Economic Value” is a great example of not doing social science research. In summary, here is a list of the research offenses of the authors both in the work and later: Since resources are limited, trade-offs are inevitable, even in terms of possible life-and-death decisions. Assigning value to individual life is one possible approach to making rational decisions about these trade-offs. Similarly, they use the recessions of the late 1990s and early 2000s as proxies for the impact of the Great Recession on current law graduates (relative to undergraduate graduates) (p. 32), downplaying the significance of recent seismic changes in the legal profession and the impact on graduate students after 2008. (Simkovic graduated in 2007.) As part of the benefit-cost analysis, the team measured each dollar value of an environmental benefit by estimating how many dollars a person is willing to pay to reduce or eliminate a current threat to their health, also known as “willingness to pay” (WTP). The U.S. TSP population was estimated and tabulated for various categories such as mortality, chronic bronchitis, high blood pressure, IQ changes, and stroke. Thus, the individual WTPs were summed to obtain the value of a statistical lifetime (VS) for each category considered in the assessment of the benefits of the legislation.

[14] Each assessment in Figure 1 is the result of several studies that have compiled and averaged both WTP information collected from individuals and estimated WTP estimates based on the risk compensation required in the current labour market to find a unique HRV. These labor market data come from the Census of Fatal Workplace Injuries collected by the Bureau of Labor Statistics. [15] The income elasticity of the value of statistical life insurance has been estimated to be between 0.5 and 0.6. [38] Developing markets have a lower statistical life value. [38] The statistical value of life also decreases with age. [38] Finally, the authors show once again that they do not really believe in their own theory. They should say that projections don`t matter because law degrees increase human capital for all professions, not because they are unreliable. But the cautious reader will have noticed a glaring omission in the previous argument: how much will it cost a law graduate to generate this bonus? The authors estimate the median after-tax value of a law school at $420,000.

How much will the average law student end up paying, in principal and interest, to make that investment? The answer is $444,150. After a long list of “significant limitations” of their study—including my favorite, the inability to “determine the income premium associated with attending a particular law school”—the authors conclude: “Overall, a law degree is often a good investment.” (page 50) I agree. The most important question is: when not? The idea of the diagram is to discover what drives people to make a decision knowing that the value of life is useful for conducting a cost-benefit analysis, especially as it relates to public policy. In order to decide whether a policy is worthwhile, it is important to accurately measure the costs and benefits. Public programs that address things like safety (e.g., roads, disease control, housing) require accurate evaluations to budget spending. [18] Page 5 of 10 11 You just bought a 16-year zero-coupon bond with face value In Australia, the value of a statistical life was determined as follows: I will proceed in two parts. First, for the purposes of argument, I presume that the interpretation of the data in the document in relation to the value of legal degrees acquired in the past is correct and that, as they argue, there is no valid reason to believe that this value will not be maintained in relation to legal degrees acquired in the future.

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