Craft, R. Kim, and Joe G. Baker. "Do Economists Make Better Lawyers? Undergraduate Degree Field and Lawyer Earnings." Journal of Education 34 (Summer 2003): 263-281.
263: Lawyers with undergraduate training in economics earn more than other lawyers,
ceteris paribus, and economics is the only undergraduate field associated with earnings
that differ significantly. The available evidence supports the hypothesis that economics
training increases a lawyers human capital compared with other undergraduate majors.
277: With respect to the overall equation, our results indicate that
lawyers with economics degrees made about 12.7 percent more than the benchmark group
[political science]. For all other undergraduate majors considered in the study,
essentially no systematic difference in earnings was evident whether considering the full
sample or individual employment sectors.
278: Given the estimated equations, there are at least two possible
explanations for our finding concerning the relationship between an undergraduate degree
in economics and the earnings of lawyers. First, it might be a consequence of
self-selection. For instance, it might be that those prelaw students who are especially
talented or ambitious self-select into the field of economics, implying that the field
attracts those with naturally higher earnings potential. Similarly, it could be the case
that those who major in economics tend to choose higher paying fields of law because of
preferences associated with their choice of the economics major. This explanation implies
that whereas there is an association between an economics degree and higher earnings,
there is not a cause and effect relationship. The other possible explanation is that an
economics education helps students develop a stock of human capital that is particularly
valuable to those in the legal profession.
278: we created an additional category consisting of those
undergraduate majors, other than economics, that tend to produce the highest LSAT scores:
physics, math, philosophy, and religion (Nieswiadomy 1998). These are the four disciplines
identified by Nieswiadomy as producing higher LSAT scores than economics produced.... our
findings indicated that an undergraduate degree in these high-ability fields was not
associated with higher earnings for lawyers.
279: Prior to 1970, having an economics baccalaureate degree would
probably not have been helpful in law school. However, the 1970s saw rapid growth in
law and economics in legal education, especially at the top schools.8 Today,
many law lectures are replete with references to opportunity costs, transaction costs,
moral hazard, and other economics concepts. Students with an economics background
therefore have an advantage (slight) that could translate into better performance in law
school and better initial job opportunities. Moreover, given the importance of economics
in legal education at the top schools, it might be that better schools tend to favor
economics majors, ceteris paribus, in the admissions process. If this is the case,
economics majors would have disproportionate representation at leading law schools and
consequently higher earning potential. Unfortunately, we could not test these hypotheses.
279: At least one economist is on the faculty of each of the top law
schools in North America. Joint degree programs in law and economics (Ph.D. in economics
and a J.D. in law) are offered at a number of leading universities. The economic approach
is used in many law review articles, and several journals are devoted exclusively to the
field of law and economics. Articles using the economic approach are cited in the major
American law journals, more than articles using any other approach. In 1991 and 1992, the
Nobel Prize in Economics was awarded to economists who helped found the economic analysis
of law (Ronald Coase and Gary Becker). Finally, a number of law-andeconomics scholars have
become federal judges and often use economic analysis in their opinionsfor instance,
Justice Stephen Breyer, U.S. Supreme Court, and Justices Richard A. Posner and Frank
Easterbrook, U.S. Court of Appeals for the Seventh Circuit.