Journal of Economics and Finance
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.
© Academy of Economics and Finance 2022
The accepted (post-print) version is made available after a 12-month embargo.
The final published version in the Journal of Economics and Finance may be accessed here: https://doi.org/10.1007/s12197-022-09588-6
0000-0002-6221-814X (Koch), 0000-0002-5895-3707 (Blake-Gonzalez)
Original Publication Citation
Koch, J.V., Blake-Gonzalez, B. (2020). Why has the median real income of lawyers been declining?. Journal of Economics and Finance, 1-20. https://doi.org/10.1007/s12197-022-09588-6
Koch, James V. and Blake-Gonzalez, Barbara, "Why Has the Median Real Income of Lawyers Been Declining?" (2022). Economics Faculty Publications. 68.