Does a law degree pay off? New study says yes

By Karen Sloan

April 7 (Reuters) - Parents pushing their kids to go to law or medical school have new data to back them up, thanks to researchers at Yale University and Vassar College.

A law degree, on average, increases graduates’ earnings 59% — behind only pharmacists and medical doctors, who saw earnings gains of 114% and 110%, respectively. MBA graduates saw an average 16% boost in earnings, the researchers found.

Law graduates earned an average $55,521 before law school, and $132,520 after, according to the study by Yale economics professor Joseph Altonji and Vassar economics professor Zhengren Zhu. Medical school graduates saw their average earnings increase from $48,650 to $181,691, while pharmacy grads went from $49,892 to $132,460.

Altonji and Zhu analyzed earnings data spanning from the early 1990s to 2018 for 121 advanced degrees using data compiled by the Texas Education Research Center. They found that a graduate degree increases student earnings about 17%, but that return varies widely depending on the type of advanced degree. Clinical psychologists, for example, saw only a 4% average earnings return on their degree.

“It is critical to provide students and policymakers with reliable quantitative measures for programs’ financial value,” according to the study, which was published by the Postsecondary Education & Economics Research Center based at George Washington University and American University.

Earlier research has also found that advanced degrees pay off. A 2024 study by the Education Data Initiative found that professional degrees have a potential return on investment of 2,249% over the course of a 40-year career.

The newest study took into account the cost of advanced degrees and the time it takes to obtain them. When adjusting for the relative high cost of law school, a law degree offered a 41% boost in earnings, the researchers found. That was again the third-highest increase, behind medical programs at 173% and pharmacy programs at 68%.

Law students on average had lower earnings while in school than students in many other advanced degree programs, reducing what the researchers call their “cost-adjusted returns.”

The individual school students attend also matters. “We find that MBA and J.D. programs that ranked higher in the U.S. News & World Report rankings yield higher returns than lower-ranking ones,” the study said.

That finding corresponds to annual law school employment data released by the American Bar Association, which shows that highly ranked law schools send significantly higher percentages of their graduates into associate jobs at law large law firms where salaries often start at $225,000.

Read more:

These law schools dominated the Big Law hiring market in 2024

Yale loses longtime No. 1 spot on latest US law school ranking