Thursday, April 2, 2015
Paul Campos of the University of Colorado is once again confused by my research with Frank McIntyre. This time, the source of Professor Campos’s confusion is not present value calculations, but rather grant funding.
The Economic Value of a Law Degree was not funded through grants. No disclosure of grant funding appears in that article because there was no funding to disclose.
Two follow up studies, Timing Law School and an upcoming study about differences in the law earnings premium by college major, race and gender, are funded through grants from Access Group, Inc., a non-profit that provides financial education to students and schools and aims to promote broad access to education, and the Law School Admission Council (LSAC), which is an important provider of data and research about law schools (see here and here).
The funding provided through these grants is used to buy out time so that Frank and I can spend more time on research. I do not receive the money for my teaching buyout—Seton Hall is paid so that it can find replacements to teach the classes I would have taught. The grants also provide funding for research assistants, software and equipment, summer stipends, and conferences. The payments are scheduled over a two to three year period.
Frank and I are interested in methodological rigor, not in particular results or outcomes, which in any case are unknowable until after we analyze the data. We believe in maximizing the transparency of the methods we use for our research so that it can be replicated or challenged by future empirical researchers. There has never been any effort by LSAC or Access Group to influence or censor our results.
Frank and I are proud of our success securing funding from such highly regarded organizations. We trumpet their support in the first footnote of Timing Law School, and announced it in our first blog post about Timing Law School. I also list the grants and dollar amounts of each on my CV and on my LinkedIn page.
Curiously, Professor Campos and his followers seem to think that the fact that highly regarded non-profit organizations believe our research is worthy of funding is some sort of dirty secret. We’ve practically been shouting it from the rooftops, so I suppose we should thank him for pointing it out.
Professor Campos also underestimates how common grant funding is in legal research. Faculty at many other law schools have also obtained grant funding. At Columbia, Ed Morrison has received grant funding from the National Science Foundation (NSF) for research on mortgage modification. At Texas, Wendy Wagner has received NSF grants to support studies of administrative agencies. At Harvard, Alma Cohen, Lucian Bebchuk, and Steven Shavell have all received NSF grants and private foundation grants. At Yale, Gideon Yaffe and Tom Tyler have received grants. At NYU, Jennifer Arlen, Stephen Schulhofer and Aziz Huq have all received grants. At Stanford, Dan Ho, Joan Petersilia and Erik G. Jensen have received grants.
Dalie Jimenez at University of Connecticut has received grants for studies of bankruptcy and consumer finance related issues. At Fordham, Joel Reidenberg has obtained substantial grant funding from the National Science Foundation (NSF) for research on online privacy, and at least three other faculty members that I know of have also obtained substantial grant funding. Lee Epstein at Washington University in St. Louis has obtained numerous NSF grants that have funded widely cited empirical research into judicial decision making.
The authors of After the JD have also received funding from the NSF, NALP and the American Bar Foundation, among other sources. Thomas Lyon at USC has received substantial funding from the National Institutes of Health, the NSF, and several private foundations for his work on child witnesses, child maltreatment, and domestic violence. At BU, Kevin Outterson has obtained grants to fund research on business models for antibiotic development.
These are just a few examples off the top of my head—there are many others. As law schools and government funding agencies become more resource constrained, it is natural to expect more faculty to pursue other sources of funding for their research, as faculty members in other fields have done. Of course, the most likely sources of funding are those who are already interested in the topics and issues of the research. External funding highlights the importance and relevance of legal research.
I’ve discussed my research with many audiences, from education researchers to labor economists, regulators, law professors, and financial institutions.
Lenders are in the business of predicting and pricing default risk. Research becomes more useful for that purpose as it becomes more accurate and rigorous. Several for-profit lenders have concluded, based in part on our research, that many graduate and professional students are paying too much for their student loans. Since professional school graduates are very unlikely to default on their loans or produce losses for lenders, it is profitable to lend to them at lower interest rate than that charged by the Federal Government. These lenders have therefore introduced refinancing options that both substantially reduce financing costs for borrowers and enable the lenders to earn an attractive return on their investment. With better data, both lenders and borrowers can win.
I do think that external funding of research can potentially raise a number of issues. I’ve alluded to these in my research on Risk Based Student Loans and Mortgage Securitization. Scholars who have written about these issues thoughtfully include Derek Bok, Luigi Zingales (see the chapter on “The Responsibilities of the Intellectuals”), Lee Epstein, and several researchers affiliated with the Safra Center at Harvard. In my and Frank’s case, the grants simply provided us with resources to do better and faster what we would have liked to do anyway, and perhaps moved certain projects higher up on our list of priorities.
I see a lot of value in universities having the necessary resources internally to support research on topics that are not necessarily amendable to external grant funding. If Professor Campos believes that law schools should support that kind of research, and charge tuition levels that are necessary to support it, then we agree.
If Professor Campos or anyone else has a substantive critique of our methods or our data, we welcome constructive feedback. Indeed, substantive critiques of the working paper version of the Economic Value of a Law Degree improved the published study and helped inspire Timing Law School and our upcoming follow-up.