Penn Study: Student Debt Alters Career, Partner Paths for Young Female Lawyers

Michele W. Berger | mwberger@upenn.edu | 215-898-6751
Friday, September 15, 2017

Law school graduates often leave their programs burdened with debt that can top six figures. Research from the University of Pennsylvania and Ryerson University shows that this debt, coupled with recently stagnant median first-year salaries, can negatively influence the career choices and partner prospects for new female lawyers.  


Holger Sieg

Holger Sieg is the J.M. Cohen Term Professor of Economics at Penn. 


“Women with more student debt stay longer in private-sector jobs, postpone marriage, marry men with lower earnings and delay childbearing,” economists Holger Sieg of Penn and Yu Wang of Ryerson wrote in a National Bureau of Economic Research white paper. In contrast, males with similar student debt don’t tend to change either factor.   

In economics terms, that’s called an asymmetric effect, explained Sieg, the J.M. Cohen Term Professor of Economics. In other words, the same influencers led to different outcome choices for different groups.

“Most male graduates from law school are fairly career-oriented, and whether they have debt to pay back is not going to change whether they will pursue a career in the private sector,” he said. “For women we found it’s a lot more problematic.”

Sieg and Wang used information provided by more than 1,300 female lawyers in two datasets. The first, from the American Bar Association and the National Association for Law Placement, called After the JD, follows 12 years of employment history for a nationally representative sample of lawyers admitted to the bar in 2000. The second, from the U.S. Department of Education, focuses on financial aid.

For the researchers, the combination of the surveys painted a long-term picture about the choices these individuals make, including which law school they attend and what job they take post-graduation.

“It was unique to have the full history,” Sieg said. “Ideally, you need to be able to look 10, 15 years into careers to see whether there are significant differences between students who take out a lot of debt and those who don’t.”

Once the researchers started to notice gender disparities, they built a model to try to explain what they were seeing and how to potentially change it, particularly in light of a dearth of new attorneys entering public-sector jobs.


Ideally, you need to be able to look 10, 15 years into careers to see whether there are significant differences between students who take out a lot of debt and those who don’t.”

“If you look at the caseload of public defenders, for example, how much time they spend on each case, the numbers are really abysmal,” Sieg said. “A strong point can be made that we need to get more, and maybe not just more but also higher-quality lawyers, back into the public sector. So what can you do to encourage that?”

One option is a loan-forgiveness program. In their work, Sieg and Wang looked at models that accounted for many factors, including whether the forgiveness came unconditionally to anyone working in the public sector, or with conditions attached, for instance, that the money became available after a set period of employment.

The researchers also studied weighted subsidies, which offer a set percentage of financial assistance across the board. How much each person gets would depend on base salary.

“You are accomplishing similar objectives, but you make working in the public sector more attractive,” Sieg said. “In the one case, you forgive debt; in the other case, you pay a higher salary, and with a higher salary, you can pay back debt, so it works in similar ways but there are some differential effects.”

What matters most, they found, is whether the extra money comes with strings attached. Offering complete loan forgiveness a decade down the road simply doesn’t work. Instead, successful programs provide annual incentives, whether paying a higher salary or dropping a percentage of the debt.

“That makes basic sense. You don’t want to have very high entry barriers” for these programs, Sieg said. “Instead, you want to make it easy for people to spend a year or two working in the public sector.” These findings could apply to other sectors like business or medicine assuming a public-policy component exists, he said, but this research didn’t delve into those areas.

This work was partially funded by the National Science Foundation grant SES-1355892, “Modeling the U.S. Market for Higher Education and Evaluating Public Funding Policies: Theory and Estimation,” 2014-2017.