Mellow is the Bubble

I’ve been putting in more overtime at the office, but that gives me a chance to listen to music!

Here’s Peach Kelli Pop, our space explorers:

And Skylar Gudasz covering Big Star:

At the end, if you look carefully you just might see the last gen x American as the camera pans right. I even contributed a whistle.

Gudasz’s original stuff is quite good too.

2016-04-09 Site Update

I’ve updated the site’s most popular attraction, the Lawyers Per Capita by State page, thanks to updated population and lawyer counts. Kudos to the state bars for all reporting attorney numbers on time. Back in 2014, the Census Bureau’s press department honored the page by using its contents in a “Profile America” feature on the ABA’s foundation.

And for fun, here’s a time series chart depicting the saturation of lawyers by Bureau of Economic Analysis region.

No. Attorneys Per 10,000 Residents by BEA Region

That’s all.

Wage-and-Salary Lawyer Employment Slows in 2015, Incomes Flat

The Bureau of Labor Statistics (BLS) usually completes its updates of its many measures of occupational employment for the previous year by April. Data for 2015 are now available, allowing a comprehensive summary of lawyer employment for the year. For detailed discussion of what the BLS datasets are and how they address lawyer employment, I recommend the lawyer overproduction page [updated!].

For context, according to the Current Population Survey (CPS), the number of people who reported working as lawyers in 2015 grew 2.5 percent to 1,160,000. The employment projections program (EP program) placed the number of lawyer positions at 778,700 in 2014. The discrepancy between these two measures has existed for a long time and has yet to be explained. Although the CPS is considered more reliable, the EP program estimate is appropriate for discussing future lawyer employment. The CPS measures the number of people in an occupation, but the EP program estimates the number of positions in that occupation, including people holding multiple jobs. Both measures include part-time lawyers and self-employed lawyers in all industries.

The CPS also estimated 803,000 people working as lawyers on a wage or salary basis, an implausible 9.0 percent growth from the previous year (+66,000 lawyers). By contrast, the more accurate Occupational Employment Statistics (OES) program found that the number of wage-and-salary lawyers grew by 1.1 percent last year to 609,930. The number of employee lawyers in the legal sector grew only a negligible 0.4 percent to 380,180.

Lawyer Employment by BLS Measure

Employee lawyers’ incomes were flat in 2015. The OES estimated a scant 0.6 percent median hourly wage growth, although the CPS registered a 4.2 percent median weekly wage increase. Going by the OES, the last peak for lawyers’ earnings was 2009; incomes are about $10,000 lower in real dollars since then. Here is an annualized dispersion.


10th to 90th Percentile Dispersion of Annualized OES Lawyer IncomesThese lawyer employment measures are not strong bellwethers for the value of legal education because they include many established lawyers and don’t measure recent graduate outcomes particularly well, especially those of graduates who do not promptly start careers in law. Readers are instead advised to look at my criteria for predicting improvements in law graduate outcomes for insight.

LSAT Tea-Leaf Reading: February 2016 Edition

…And why it took until the last week of March for the LSAC to put the data up is not known at this time.

20,301 people took the LSAT in February 2016, down a trivial 0.3 percent from last year (20,358).

No. LSAT Takers, 4-Testing Period Moving Sum

The four-period moving sum fell an even more trivial 0.1 percent to 105,883 tests. The last time LSATs were this low was … last year (105,940), so I’ll not regale you with what was on the pop charts as in the past.

Rereading December’s tea-leaf-reading post, I said something about how LSATs might be trending downward again after a bump. The February 2016 administration appears to be validating that hypothesis, but at this point only barely so.

Indeed, last year I thought the growth in LSAT’s was generated by people gunning for high-ranking law schools, but the 509 information reports didn’t bear that out, to my surprise. I had a hunch it’ll happen this year because there was such a surge in applications per applicant early off, but as your chief tasseographer, I ask for patience.

Speaking of applicants, I’d chart this year’s crop compared to last year’s, but they look nearly identical, so there’s no benefit. By whatever math you use, there will probably be around 56,000 applicants this year—that’s for all academic terms, not just fall.


Finally, Cornell Law School informs me that it misreported its graduate debt this year. I thank Cornell for its diligence, and the corrected figure now appears on the “debt rankings” post. As with the Idaho, I was unable to rebuild the HTML table as I’ve already deleted the master. Thus, corrections are inline only.

CBO: $1.3 Trillion in New Federal Student Loans by 2026

Each year the Congressional Budget Office (CBO) provides its baseline projections for the federal student-loan program. The projections include the total amount of new federal student loans that the office believes will be issued, future interest rates, and subsidy costs, i.e. whether the government will make or lose money on the loans. This year, the CBO projects that the government will lend an additional $1.3 trillion to students between FY2016 and FY2026. The figure is largely unchanged since the 2014-2024 period, discussed here.

Subsidy Rates

The CBO uses an accrual-accounting methodology to determine the present value of federal loans. This essentially means discounting the estimated cash flows of student loans against government securities with the same maturities. If student loans make more money than buying government debt would, then the loans are valuable. Accrual accounting does not include the market risk that a private lender would consider when making a student loan, which is why many people advocate fair-value accounting. It’s a surprisingly contentious issue, which I elaborate in the student debt data page, because under fair-value accounting, the government loses money on student loans.

Under accrual accounting, the CBO projects negative subsidy rates for federal student loans; that is, it sees the government making money on its lending. All student loans made in 2015 will make an estimated 13.9 percent return. Of interest to law-school watchers: Unsubsidized Stafford loans and Grad PLUS loans issued in FY2016 will make 19.2 percent and 18.9 percent returns, respectively. Oddly, Parent PLUS loans appear to be the most profitable for the government.

CBO Table 2This year, however, the CBO included fair-value estimates of federal student loans. Under these, the government loses about 12 percent of its investment on student loans every year until FY2026. Unsubsidized Stafford loans and Grad PLUS loans lose about 5 percent in 2016, but the losses increase over the decade. Parent PLUS loans remain profitable.

Note also that the CBO believes the net number of loans will rise during the decade. It’s already evident that federal-student-loan borrowing is declining.

CBO Table 6Under accrual accounting the student loans will net the government $85.2 billion; under fair-value accounting the government will lose $145.1 billion. This isn’t a lot of money for the government, actually, but it could obviously be redirected to better uses.

Interest Rates

A crucial variable affecting subsidy rates, for both accounting methodologies, is the CBO’s projection of future interest rates. Two years ago, the office believed interest rates would rise from less than 2 percent in 2013 to 5 percent in 2018. This year, the CBO estimates that interest rates will rise to only 3.4 percent in 2018 and 4.14 percent starting in 2022.

CBO Table 4I believe the current interest-rate predictions are more plausible than the office’s estimates two years ago. The interest rate on 10-year government bonds has been falling this year, so the CBO may be overly pessimistic again for FY2016.


In all, I think the CBO is overly pessimistic with these assumptions. Student borrowing is declining, and there isn’t much of a reason to believe interest rates will rise. This doesn’t mean the government won’t make bad loans, or that the skills and knowledge they pay for will make the workforce more productive, but it’ll probably be less than $145.1 billion.

Update to U.S. News ‘Debt Rankings’ Post

The University of Idaho College of Law has corrected the 2015 graduate debt amount that it reported to U.S. News. Unfortunately, I already deleted the HTML source table for the post on the topic, so I cannot rebuild it easily. Instead, I’ve made inline corrections to the table. As a result, I feel its fair to give Idaho a post concerning its correction. I wish more law schools were as diligent about their graduate debt data. Readers can find the post here.

Current Circumstances Cast a Shadow on Past Decisions

Put positively: Current circumstances illuminate past decisions.

I guess it works.

I flipped through Access Group’s and Gallup’s jointly produced report, “Life After Law School” (pdf), which surveyed a panel of 7,000 recent and not-so-recent law-school graduates of some Southeastern law schools. I don’t have much time or interest in picking apart the study, but I observe that the seven schools it chose are a pretty broad range, from older, established Vanderbilt to recent Elon. There aren’t any for-profits though.

I thought I’d illustrate some of “Life After Law School”‘s tables. There are times when tables are helpful, e.g. lists of law schools, and times when we prefer charts, like when we want to see trends. “Life After Law School” is a time for trends.

Here’s how graduates answered, “If I could do it again, I’d still get a law degree.”

If I could do it over again

“These results could reflect the lack of time more recent graduates have had to realize the value of their law degree or their greater difficulty in finding a good job after graduation.”

You can see growing dissatisfaction with law school among recent graduates.

And here’s, “My degree from LAW SCHOOL was worth the cost.”

My law degree

Again, growing dissatisfaction over the decades. I’ll not chart the report’s debt table because it doesn’t break the numbers down by approximate graduation year. Time is what we’re talking about.

So here’s a question: Do graduates become more satisfied with law school over time, or is this a phenomenon unique to recent grads? Predictably, Access Group believes the former; it says so in the introduction. “While [metrics of near-term earnings and job placement of recent graduates] have merit, they do not provide a holistic view of graduates’ lives or the broader benefits that legal education provides.” If the long-term picture looks good, then we can discount the experiences of recent graduates.

Alternatively, factors outside law schools and law degrees affect people’s job outcomes and happiness. For example, if demand for legal services stagnates, and universities keep opening law schools, and the costs rise without quantified benefits, then we should expect more people to be dissatisfied with law school.

Thus, “Life After Law School” echoes the After the JD study, whose own authors misinterpreted their results, treating survey responses as evidence of legal education’s value rather than the respondents’ perception of their legal educations’ values. Current circumstances feed into perceptions of past decisions. As always, the question is, were there better alternatives to law school when people chose to attend. Recent graduates’ jaundiced perception of law school indicates they believe there were better alternatives in hindsight. But that’s a question Access Group won’t ask.