2020: Applications and Enrollments Flat

By October 2020, there were 36,802 enrollees from the applicant pool at 194 ABA-accredited law schools not in Puerto Rico. This is down 173 (-0.5 percent) from 36,975 in October 2019. La Verne, Thomas Jefferson, and Concordia no longer grace the ABA’s spreadsheets.

Moving to applications, these 194 law schools received 375,541 applications to all their programs, up 50 (-0.0 percent) from 375,491. The median law school accepted 45.4 percent of its applicants, which is down from 47.1 percent in 2019. Here’s an image of the dispersion.

Shifting to distribution, the Gini coefficient for applications among these 194 law schools is down to 0.435. Last year (2019) it was .444, so 2020 looks more like 2018, but these are slight fluctuations compared to 2011 when it was 0.357. (You can read about how to interpret Gini coefficients mean here.)

As with previous years, below is a modified Lorenz curve, a line that typically measures the cumulative distribution of a quantity in order from the recipient of the smallest amount to the largest. Usually researchers use it to illustrate the distribution of income among households. I’ve modified the Lorenz curve according to the U.S. News and World Report rankings for the previous year because the rankings are an independent measurement of law-school eliteness as seen by LSAT takers and applicants roughly at the time that they apply. Here is what I could cobble together going back to 2011.

It’s not very clear because the last few applications cycles have been very similar, but after squinting and clicking around, I saw that indeed, the distribution of applications shifted away from the more prominent law schools. Within the top 14, 20, 50, 51-100, 101 plus, and not published, the mean average of the share of all applications are very similar to 2019.

Information on this topic from prior years:

It’s 2021. Where’s My ‘Hyperinflationary Great Depression’?

[The following post first appeared on this site on January 1, 2012. What it said then still applies today, mutatis mutandis. Thanks for reading the blog and have a prosperous 2021!]

Behold, the curse of a long memory. Last January [2011], Google Alerts sent me an e-mail informing me that the National Inflation Association (“Preparing Americans for Hyperinflation”) issued a press release predicting that the higher ed bubble was “set to burst beginning in mid-2011. This bursting bubble will have effects that are even more far-reaching than the bursting of the Real Estate bubble in 2006.” The NIA press release then digressed into legal education (I’m guessing they’d just read David Segal’s first NYT piece a few days earlier), how evil lawyers are, how they produce nothing for society, and how 60 percent of the Senate and 37 percent of the House are lawyers who rig the economy to make jobs for lawyers. It editorializes:

“While everybody went to school to become a lawyer [really?], nobody went to school to become a farmer because Americans didn’t see any money in farming. With prices of nearly all agricultural commodities soaring through the roof in 2010 and with NIA expecting this trend to continue throughout 2011, the few new farmers out there are going to become rich while lawyers are standing at street corners with cups begging for money.”

The NIA would’ve been more helpful if it explained how lawyers could be a drain on society yet remain vulnerable to market forces. Also, one would think unemployed lawyers would try to find non-lawyer jobs instead of begging, but I think it’s important to note that agricultural prices weren’t “soaring through the roof” in 2010. They were growing, yes, but although the NIA was right that they continued to do so in 2011, (a) it’s stalled recently, and (b) they’re no worse than they were in the 1980s and early 1990s.

Oh well. The NIA sternly concluded:

“We must work hard to educate America to the truth if our country is going to have the wherewithal to survive the upcoming bursting college bubble and Hyperinflationary Great Depression.”

Whoa.

I can’t say I’m quite as disappointed as the NIA undoubtedly is that we’re not seeing much inflation these days, and in mid-2011 I didn’t see many colleges cutting their tuition, laying off faculty, closing programs, or trying to retrench themselves. I also remain unconvinced that $1 trillion in student debt can be worse than $8 trillion in mortgage debt. True, student debt is not dischargeable (unlike mortgage deficiencies) absent a showing of an undue hardship, and it’s hampering the recovery and ruining lives, but it’s not worse in quantity than the housing bubble. As for the NIA’s paranoid ranting about lawyers, all economic evidence I’ve seen indicates that legal services have all but stagnated for much of the last two decades. Apparently, those 60 percent of lawyer-senators aren’t very good at creating work for themselves. I suppose the NIA should express appreciation.

Anyway, if anything, inflation would be a boon to underwater homeowners and student debtors because it erodes the real value of their debts, which grew significantly in the 2000s. Here’s household debt to GDP:

Importantly, I’m no macroeconomist but I’ve never heard of a “hyperinflationary depression.” The terms contradict each other. Depressions occur when people take on excessive debt and begin paying it down simultaneously instead of spending money on other things. This is deflationary because new credit isn’t being created, even by the government. By contrast, hyperinflation has only occurred in unusual circumstances, like when a government owes debts to foreigners in a different currency. Weimar Germany, for example, owed gold-dominated war reparations to the Allied powers, and to purchase the gold, it printed money, causing hyperinflation. Zimbabwe isn’t a good comparison either because it’s a small, HIV-ridden landlocked state with an undiversified, oligopolistic agrarian economy while the U.S. is a wealthy, continent-spanning super-state.

As for inflation fears generally, maybe it’s the fact that I have no memory of high inflation, but why isn’t there a “National Personal Income Association” (NPIA) that regularly celebrates increases in Americans’ per capita personal income?

“Per capita personal income has quadrupled since 1980! Prices didn’t even triple! Hooray! We’re rich! Fiat currency forever and ever! ‘You shall not crucify mankind upon a cross of gold!'”

I’m sure the NPIA wouldn’t’ve been too thrilled with 2008-09, but personal income is increasing again. The problem has just been that over the decades those gains haven’t been distributed equally. This isn’t a problem of inflation but one of wages and taxation.

Intuition tells me the NIA won’t spend early 2012 carefully discussing why the higher ed bubble didn’t burst in mid-2011 as it predicted, nor will it take the time to explain why Americans—many of whom are net debtors—should be concerned about inflation. Instead it will prophecy even more hyperinflation later. But here’s hoping the National Inflation Association won’t provide me entertainment come January 1, 2013. Such is the curse of a long memory.

Labor Dept.: 32,300 New Lawyer Jobs by 2029, Turnover of 24 Percent

On September 1, 2020, the Bureau of Labor Statistics (BLS) released its employment projections for the next cycle, 2019-2029.

For 2019, the BLS’s Employment Projections program (EP program) estimates that there were 813,900 lawyer positions (as opposed to discrete lawyers) in the United States. This figure includes self-employed attorneys. In 2019, the EP program found 823,900 lawyer positions, a small decline from last year. According to the BLS’s Current Population Survey (CPS), in 2019, 1.24 million people worked as lawyers in the United States. The discrepancy between the CPS and the EP program has existed for some time. In their respective contexts, both figures are correct.

The BLS projects future employment trends in part to help job seekers evaluate career choices, and the projections play an outsized role in the BLS’s Occupational Outlook Handbook. Here is an illustration from various sources that converts the flows of law-school graduates and new lawyers into stocks that can be compared to BLS employment measures since the 1980s.

Click here to read more:

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Rebuilding After Riots

…Appears on the Robert Schalkenbach Foundation’s blog. A quote:

Rebuilding the destroyed neighborhoods of Minneapolis requires visibly building community solidarity, something land-value tax districts and a community currency would promote.

Read the full article here.

Disclosure: I sit on the Robert Schalkenbach Foundation’s board.

Minor editorial: The destruction and authorities’ response reminded me of tropical storm Sandy. Everything is fine for me, though, so I am grateful. I hope all you readers are well too through this daily dark age.

2018: Full-Time Law Students Paying Full Tuition Fall by 2.2 Percentage Points

Discussions of law-school costs are incomplete if they do not account for discounts some students receive, usually merit scholarships paid for by their full-tuition-paying classmates. To analyze the phenomenon of discounting, I focus on the ABA’s 509 information reports’ scholarship data. This information lags the academic year by one year, so as of the 2019-20 academic year, we now have data on 2018-19.

At the average law school not in Puerto Rico in 2018, the proportion of full-time students paying full tuition fell by 2.2 percentage points from 25.6 percent to 23.4 percent. At the median law school now not even one in five students pays full tuition.

The proportion of students paying full tuition has declined considerably over the years. At the turn of the century, more than half of students paid full cost; now about a quarter do.

At private law schools, which are easier to analyze because they don’t price discriminate in favor of resident students, the average number of students receiving grants ranging between half and full tuition now clearly exceeds the number paying full tuition. Many more receive a grant worth less-than-half tuition, though their numbers have flattened.

One advantage of knowing how many full-time students pay full tuition is that we can estimate the total revenue they generate for private law schools, except Brigham Young, which charges LDS students less.

Since 2011, the peak year, inflation-adjusted revenue from full-tuition-paying full-time students has fallen 55 percent. Since 2001, the first year for which data are available, the drop is 35 percent. In 2018, the median private law school’s full-tuition revenue was $4.4 million, down from $13 million in 2011 but up 9 percent since 2016. In 2001, the median was $9.6 million. This is quite a decline.

So how substantially are private law schools discounting? The best way to answer that question is by using the sticker price at private law schools as the independent variable, and treating as the dependent variable their tuition after subtracting their median grant (median-discounted tuition “MDT”). First I divide private law schools into full tuition quintiles and give their mean averages. Then I take mean of the MDTs within each quintile.

We find that while full tuition inexorably climbs upward and disperses, the MDTs are trending downward and converging, indicating significant discounting. Notably, the MDT at the most expensive law schools is about as much as full tuition at the cheapest private law schools.

And now for the most important segment of this report: ridicule of law schools for clearly misreporting scholarship data to the ABA:

  • This year’s winner was also last year’s, so it gets a special commendation. Mitchell | Hamline gave out 445 grants to full-time students when it only enrolled 442. Keep on with the basic errors in arithmetic, M|H.
  • Number 2 is Idaho’s second law school, Concordia, whose future was recently put in doubt. It may seem unfair to kick a law school when it’s down, but fair is fair, and other troubled law schools did better. Concordia gave 129 grants to only 116 full-time students for a -13 full timers paying full tuition.
  • South Dakota itemized full-time scholarship data but nevertheless reported 0 receiving any full-time grants. Oops.
  • Florida Coastal subtly misreported its less-than-half-, half-to-full-, full-, and more-than-full-tuition grants at 130 altogether, yet its total full-time students receiving grants numbered 156. Who are the 26 mystery recipients, Florida Coastal? Who?
  • Baylor’s itemized grant recipient numbers also don’t add up. It specified grants to 378 students out of 381.
  • Finally, Nebraska engaged in a similar misreporting, but only chalked up one mystery recipient.

Six is pretty bad, but at least only the first two were negative recipients.

Information on this topic from previous years:

Solving the ‘Affordable Housing’ Problem with Land Value Taxes

…Appears on the Robert Schalkenbach Foundation’s blog. Here’s a snippet.

Land value taxation should, in theory, raise total wages and greatly increase the housing supply; but people should be mobile too, even including nonresidents who come in to elbow out poorer ones for the benefits the system provides. In Minneapolis where I live, we have seen significant growth in high-end housing in recent years but very little for the poor.

So what can a local government do to ensure that land value taxes help the people who need help the most, rather than high-income newcomers?

Read more here.

Disclosure: I sit on the foundation’s board.

It’s 2020. Where’s My ‘Hyperinflationary Great Depression’? (And Where’s My Cyberpunk?)

[The following post first appeared on this site on January 1, 2012. What it said then still applies today, mutatis mutandis. Thanks for reading the blog and have a prosperous 2020!]

Behold, the curse of a long memory. Last January [2011], Google Alerts sent me an e-mail informing me that the National Inflation Association (“Preparing Americans for Hyperinflation”) issued a press release predicting that the higher ed bubble was “set to burst beginning in mid-2011. This bursting bubble will have effects that are even more far-reaching than the bursting of the Real Estate bubble in 2006.” The NIA press release then digressed into legal education (I’m guessing they’d just read David Segal’s first NYT piece a few days earlier), how evil lawyers are, how they produce nothing for society, and how 60 percent of the Senate and 37 percent of the House are lawyers who rig the economy to make jobs for lawyers. It editorializes:

“While everybody went to school to become a lawyer [really?], nobody went to school to become a farmer because Americans didn’t see any money in farming. With prices of nearly all agricultural commodities soaring through the roof in 2010 and with NIA expecting this trend to continue throughout 2011, the few new farmers out there are going to become rich while lawyers are standing at street corners with cups begging for money.”

The NIA would’ve been more helpful if it explained how lawyers could be a drain on society yet remain vulnerable to market forces. Also, one would think unemployed lawyers would try to find non-lawyer jobs instead of begging, but I think it’s important to note that agricultural prices weren’t “soaring through the roof” in 2010. They were growing, yes, but although the NIA was right that they continued to do so in 2011, (a) it’s stalled recently, and (b) they’re no worse than they were in the 1980s and early 1990s.

Oh well. The NIA sternly concluded:

“We must work hard to educate America to the truth if our country is going to have the wherewithal to survive the upcoming bursting college bubble and Hyperinflationary Great Depression.”

Whoa.

I can’t say I’m quite as disappointed as the NIA undoubtedly is that we’re not seeing much inflation these days, and in mid-2011 I didn’t see many colleges cutting their tuition, laying off faculty, closing programs, or trying to retrench themselves. I also remain unconvinced that $1 trillion in student debt can be worse than $8 trillion in mortgage debt. True, student debt is not dischargeable (unlike mortgage deficiencies) absent a showing of an undue hardship, and it’s hampering the recovery and ruining lives, but it’s not worse in quantity than the housing bubble. As for the NIA’s paranoid ranting about lawyers, all economic evidence I’ve seen indicates that legal services have all but stagnated for much of the last two decades. Apparently, those 60 percent of lawyer-senators aren’t very good at creating work for themselves. I suppose the NIA should express appreciation.

Anyway, if anything, inflation would be a boon to underwater homeowners and student debtors because it erodes the real value of their debts, which grew significantly in the 2000s. Here’s household debt to GDP:

Importantly, I’m no macroeconomist but I’ve never heard of a “hyperinflationary depression.” The terms contradict each other. Depressions occur when people take on excessive debt and begin paying it down simultaneously instead of spending money on other things. This is deflationary because new credit isn’t being created, even by the government. By contrast, hyperinflation has only occurred in unusual circumstances, like when a government owes debts to foreigners in a different currency. Weimar Germany, for example, owed gold-dominated war reparations to the Allied powers, and to purchase the gold, it printed money, causing hyperinflation. Zimbabwe isn’t a good comparison either because it’s a small, HIV-ridden landlocked state with an undiversified, oligopolistic agrarian economy while the U.S. is a wealthy, continent-spanning super-state.

As for inflation fears generally, maybe it’s the fact that I have no memory of high inflation, but why isn’t there a “National Personal Income Association” (NPIA) that regularly celebrates increases in Americans’ per capita personal income?

“Per capita personal income has quadrupled since 1980! Prices didn’t even triple! Hooray! We’re rich! Fiat currency forever and ever! ‘You shall not crucify mankind upon a cross of gold!'”

I’m sure the NPIA wouldn’t’ve been too thrilled with 2008-09, but personal income is increasing again. The problem has just been that over the decades those gains haven’t been distributed equally. This isn’t a problem of inflation but one of wages and taxation.

Intuition tells me the NIA won’t spend early 2012 carefully discussing why the higher ed bubble didn’t burst in mid-2011 as it predicted, nor will it take the time to explain why Americans—many of whom are net debtors—should be concerned about inflation. Instead it will prophecy even more hyperinflation later. But here’s hoping the National Inflation Association won’t provide me entertainment come January 1, 2013. Such is the curse of a long memory.

2019: Full-Time Private Law School Tuition Up 1.5 Percent, ABA Excludes Fees

Full-time tuition at private ABA-accredited law schools rose 1.5 percent before adjusting for inflation, according to my analysis of (mainly) data released by the ABA in December. I focus on private law school tuition because public law schools receive varying degrees of state subsidies, so they do not reflect the already distorted legal-education market’s prices.

This year’s data release features a revision to the ABA’s collection methodology: providing fees that law schools frequently added to the headline tuition charges. Law schools often give these fees vague names like, “mandatory fees,” which sounds redundant to “tuition.” It’s a phenomenon I noticed very early in my blogging on the topic.

Because of this change to the data-collection methodology, this year’s data should be taken with some skepticism when compared to last year’s because in the past law schools sometimes submitted their tuition and fees as one figure to the ABA and U.S. News while others did not. Now, hopefully, we can compare just the tuition numbers. Consequently, it is possible the change distorts the 1.5 percent annual increase downward. Indeed, the increases in 2019 look less like 2018 and more like 2014 or 2015: increases at expensive law schools and decreases among the cheapest ones. In past years, I hypothesized that these schools were simply too fiscally crunched to afford tuition increases. Perhaps that trend has resumed.

Headline Findings

Separating private law schools into quintiles, here are the increases at the mean of each quintile.

(more…)

2019: Law School Applications Fall 1 Percent, Enrollments Flat

By October 2019, there were 36,983 enrollees from the applicant pool at 197 ABA-accredited law schools not in Puerto Rico. This is down 67 (-0.2 percent) from 37,050 in October 2018. Three law schools, Valparaiso, Whittier, and Arizona Summit, appear on the ABA’s required disclosures Web site and spreadsheets, but they are just placeholders. Arizona Summit had 17 enrollees last year. La Verne and Thomas Jefferson do have 509 reports, even though they announced their closures.

Moving to applications, these 197 law schools received 375,468 applications to all their programs, down 3,679 (-1.0 percent) from 379,147. The median law school accepted 47.1 percent of its applicants, but that’s only down from 47.9 percent in 2018. Here’s an image of the dispersion; overall, they’re trending downward, signifying increased selectivity.

With fewer applications and flat enrollments, the analysis of application distribution becomes more salient. Once again, applicants trended toward more interest in some law schools than others. The Gini coefficient for applications among all 197 of these law schools is now 0.444, which is negligibly higher than last year (0.436). By contrast, back in 2011 it was only 0.357. (You can read about how to interpret Gini coefficients mean here.)

As with previous years, below is a modified Lorenz curve, a line that typically measures the cumulative distribution of a quantity in order from the recipient of the smallest amount to the largest. Usually researchers use it to illustrate the distribution of income among households. I’ve modified the Lorenz curve according to the U.S. News and World Report rankings for the previous year because the rankings are an independent measurement of law-school eliteness as seen by LSAT takers and applicants roughly at the time that they apply. Here is what I could cobble together going back to 2011.

The U.S. News rankings can be quite fluid year to year the further down its list one goes, and in the previous two years there’s been some shifting into and out of the top 50, next 50, and 101-150. It appears that the average top-50 law school received 2.4 percent less applications than in the 2018 cycle, but in the more static top 14, the average was plus 4.9 percent. The next 50 saw a 1.3 percent decline on average, but the remaining didn’t change much at all.

Information on this topic from prior years:

The Minneapolis 2040 Plan Is Unlikely to Provide Affordable Housing

…Appears on the Robert Schalkenbach Foundation’s Web blog.

I argue that the residential upzoning policies in the Minneapolis 2040 comprehensive plan won’t really lead to more affordable housing. Here’s a quote:

[The] Minneapolis 2040 plan does something that no other major American city has ever attempted: it shifts zoning practice away from real-estate parcels for single-family use. No, it doesn’t abolish them altogether, thus forcing homeowners to build condos or apartment buildings. Rather, the plan permits homeowners in the least developed parts of Minneapolis to upgrade their lots into duplexes or triplexes. Landowners living along transit corridors will have even greater development options. This policy, referred to as “upzoning,” is popular among urban advocates, and until now cities have only implemented it piecemeal. The plan’s purpose for these ambitious changes includes increasing the availability of affordable housing, reducing rents, and helping realize the mayor’s goal of racial justice.

You can read the rest here.

[Edit: Oh, gosh! Where are my manners? I must add for full disclosure and transparency that I sit on the board of the Robert Schalkenbach Foundation.]