The ABA Journal posted an interesting article about the value of a law degree. "[T]wo researchers who previously concluded that the present value of a law degree is about $1 million more, on average, than the value of a college degree" are now concluding that a bad economy has a relatively small impact on lifetime earnings.
The researchers conclude that "[g]raduating from law school in a bad economy has a relatively small impact on lifetime earnings relative to graduating with a bachelor’s degree, according to a preliminary draft research paper by the researchers, Rutgers University economics and business professor Frank McIntyre and Seton Hall University law professor Michael Simkovic, a visiting research scholar at Fordham University’s law school."
They find that "[t]hough unemployment levels at graduation affect pay for the first four years, particularly in boom times, the impact fades as law graduates gain experience, according to the new paper (available here) by McIntyre and Simkovic."
How small is this relative impact on lifetime earnings? "Overall, the value of a law degree, compared to an undergraduate degree, declines by about $30,000 for those who graduate when unemployment is high rather than low."
And the researchers note that it is not wise try to time law school to attend during a boom time by delaying entry over $30,000. “The opportunity cost of a two-year delay in law school completion—that is, lower earnings early in one’s career working with a bachelor’s degree rather than a law degree—would typically outweigh gains from even a successful law school timing strategy,” McIntyre and Simkovic write.
Although it may be true that a law-degree holder will net, on average, $1 million more in lifetime earnings over an undergraduate-degree holder, this must be offset with the cost of attendance and student loans. It is not unusual for law students to graduate with over $100,000 in debt (+ added interest), and the debt should be factored into the lifetime earnings calculation. Even still, I'll be generous and estimate that with debt and in a bad economy, the lifetime earnings of a law-degree holder only go down $200,000, it is still a worthwhile investment according to these researchers calculations.