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Published in: Journal of Economics and Finance 4/2022

26-07-2022

Why has the median real income of lawyers been declining?

Authors: James V. Koch, Barbara Blake-Gonzalez

Published in: Journal of Economics and Finance | Issue 4/2022

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Abstract

The median real incomes of lawyers have been declining. In 2001, the median real income of lawyers in the 50 states plus the District of Columbia was $129,389 (July 2020 prices). Almost two decades later, in 2020, this number had fallen to $126,930, 1.90% less than in 2001. By contrast, the median real income of workers in all occupations together rose 3.93% between 2001 and 2020, while the median real income of the average family practice physician rose 20.15% and the median real income of a typical economist rose 10.9%. We examine both supply and demand influences to explain the declining median real incomes of lawyers. An oversupply of lawyers provides only a partial explanation. The number of lawyers per 1,000 people nationally did nudge upward from 1.72 in 2001 to 2.22 in 2020, but the number of first year law students nationally in 2020 was 6.6% smaller than in 2001. Supply side adjustments to new market conditions take years to occur and hence we observe some cobweb-like oscillations in lawyers’ incomes. Demand side influences on lawyers’ incomes loom large. Between 2008 and 2019, lawyers’ income share of the national gross domestic product fell from 1.64% to 1.32% because clients purchased lawyers’ services less often.
Footnotes
1
 
2
Either smaller entering law school classes or more individuals dropping out of law schools could cause this.
 
3
NAICS is the National Industry Classification System and is the standard schema used by the United States Government to identify economic activity (NAICS 2021).
 
4
Civil and criminal cases.
 
5
St. Paul in his Epistle to Titus, Chapter 1, Verse 11: “whose mouths must be stopped, who subvert whole houses, teaching things they ought not, for filthy lucre’s sake.” In King James Bible Online, www.​kingjamesbibleon​line.​org.
 
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Metadata
Title
Why has the median real income of lawyers been declining?
Authors
James V. Koch
Barbara Blake-Gonzalez
Publication date
26-07-2022
Publisher
Springer US
Published in
Journal of Economics and Finance / Issue 4/2022
Print ISSN: 1055-0925
Electronic ISSN: 1938-9744
DOI
https://doi.org/10.1007/s12197-022-09588-6

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