Elite Universities and Women's Careers--Posner

An article in the New York Times of September 20 by Louise Story, entitled "Many Women at Elite Colleges Set Career Path to Motherhood," reports the results of surveys and interviews concerning career plans of women at the nation's most prestigious colleges, law schools, and business schools. Although not rigorously empirical, the article confirms--what everyone associated with such institutions has long known--that a vastly higher percentage of female than of male students will drop out of the work force to take care of their children. Some will resume full-time work at some point in the children's maturation; some will work part time; some will not work at all after their children are born, instead devoting their time to family and to civic activities. One survey of Yale alumni found that 90 percent of the male alumni in their 40s were still working, but only 56 percent of the female. A survey of Harvard Business School alumni found that 31 percent of the women who had graduated between 10 and 20 years earlier were no longer working at all, and another 31 percent were working part time. What appears to be new is that these earlier vintages did not expect to drop out of the workforce at such a high rate (though they did), whereas current students do expect this. That is not surprising, since the current students observe the career paths of their predecessors. So, contrary to the implication of the article, there is no evidence that the drop-out rate will rise. The article does not discuss the interesting policy issues presented by the disproportionate rate of exit of elite women from the workforce. Nor does it have much to say about why women drop out at the rate they do. The answer to the latter question seems pretty straightforward, however. Since like tend to marry like ("assortative mating"), women who attend elite educational institutions tend to marry men who attend such institutions (and for the further reason that marital search costs are at their minimum when the search is conducted within the same, coeducational institution). Those men have on average high expected incomes, probably higher than the expected incomes even of equally able women who have a full working career. Given diminishing marginal utility of income, a second, smaller income will often increase the welfare of a couple less than will the added household production if the person with the smaller income allocates all or most of her time to household production, freeing up more time for her spouse to work in the market. The reason that in most cases it is indeed the wife (hence my choice of pronoun) rather than the husband who gives up full-time work in favor of household production is not only that the husband is likely to have the higher expected earnings; it is also because, for reasons probably both biological and social, women on average have a greater taste and aptitude for taking care of children, and indeed for nonmarket activities generally, than men do. But it is at this point that policy questions arise. Even at the current very high tuition rates, there is excess demand for places at the elite colleges and professional schools, as shown by the high ratio of applications to acceptances at those schools. Demand is excess--supply and demand are not in balance--because the colleges and professional schools do not raise tuition to the market-clearing level but instead ration places in their entering classes on the basis (largely) of ability, as proxied by grades, performance on standardized tests, and extracurricular activities. Since women do as well on these measures as men, the student body of an elite educational institution is usually about 50 percent female. Suppose for simplicity that in an entering class at an elite law school of 100 students, split evenly among men and women, 45 of the men but only 30 of the women will have full-time careers in law. Then 5 of the men and 20 of the women will be taking places that would otherwise be occupied by men (and a few women) who would have more productive careers, assuming realistically that the difference in ability between those admitted and those just below the cut off for admission is small. While well-educated mothers contribute more to the human capital of their offspring than mothers who are not well educated, it is doubtful that a woman who graduates from Harvard College and goes on to get a law degree from Yale will be a better mother than one who stopped after graduating from Harvard. But I have to try to be precise about the meaning of "more productive" in this context. I mean only that if a man and woman of similar ability were competing for a place in the entering class of an elite professional school, the man would (on average) pay more for the place than the woman would; admission would create more "value added" for him than for her. The principal effect of professional education of women who are not going to have full working careers is to reduce the contribution of professional schools to the output of professional services. Not that the professional education the women who drop out of the workforce receive is worthless; if it were, such women would not enroll. Whether the benefit these women derive consists of satisfying their intellectual curiosity, reducing marital search costs, obtaining an expected income from part-time work, or obtaining a hedge against divorce or other economic misfortune, it will be on average a smaller benefit than the person (usually a man) whose place she took who would have a full working career would obtain from the same education. The professional schools worry about this phenomenon because the lower the aggregate lifetime incomes of their graduates, the lower the level of alumni donations the schools can expect to receive. (This is one reason medical schools are reluctant to admit applicants who are in their 40s or 50s.) The colleges worry for the same reason. But these particular worries have no significance for the welfare of society as a whole. In contrast, the fact that a significant percentage of places in the best professional schools are being occupied by individuals who are not going to obtain the maximum possible value from such an education is troubling from an overall economic standpoint. Education tends to confer external benefits, that is, benefits that the recipient of the education cannot fully capture in the higher income that the education enables him to obtain after graduation. This is true even of professional education, for while successful lawyers and businessmen command high incomes, those incomes often fall short of the contribution to economic welfare that such professionals make. This is clearest when the lawyer or businessman is an innovator, because producers of intellectual property are rarely able to appropriate the entire social gain from their production. Yet even noninnovative lawyers and businessmen, if successful--perhaps by virtue of the education they received at a top-flight professional school--do not capture their full social product in their income, at least if the income taxes they pay exceed the benefits they receive from government. Suppose a professional school wanted to correct the labor-market distortion that I have been discussing. (For I am not suggesting that the distortion is so serious as to warrant government intervention.) It would be unlawful discrimination to refuse admission to these schools to all women, for many women will have full working careers and some men will not. It would be rational but impracticable to impose a monetary penalty on the drop-outs (regardless of gender)--making them pay, say, additional tuition retroactively at the very moment that they were giving up a market income. It would also be infeasible to base admission on an individualized determination of whether the applicant was likely to have a full working career. A better idea, though counterintuitive, might be to raise tuition to all students but couple the raise with a program of rebates for graduates who work full time. For example, they might be rebated 1 percent of their tuition for each year they worked full time. Probably the graduates working full time at good jobs would not take the rebate but instead would convert it into a donation. The real significance of the plan would be the higher tuition, which would discourage applicants who were not planning to have full working careers (including applicants of advanced age and professional graduate students). This would open up places to applicants who will use their professional education more productively; they are the more deserving applicants. Although women continue to complain about discrimination, sometimes quite justly, the gender-neutral policies that govern admission to the elite professional schools illustrate discrimination in favor of women. Were admission to such schools based on a prediction of the social value of the education offered, fewer women would be admitted.

Comments

[Jeff]

You bring up an interesting point. I am the father of two daughters, and pay for an expensive private school education for them. I have a wife who is college educated and dropped out of the work force to raise my two kids.

My friends and I joke that we are financing an education that will end in motherhood.

I think along with the negative externality that Posner cites, there are positive externalities that occur from having a well educated mother. Having a good education is like purchasing insurance. If we assume a traditional husband-wife relationship and the husband becomes unable to work, dies, or divorces the woman, the women should be able to get back into the workforce and utilize the skills she acquired in college.

There is a positive externality that is not accounted for when the children are consistently exposed to a well educated mother. She should be a better decision maker and rear a better child.
This should be a future benefit to society.

Posner is correct when he states that tuition is not at a market clearing price. However, even though business and law schools are generally not subsidized, the main of education is. This skews the tuition rate for every school, including graduate schools that have nothing to do with business, law or medicine.

His idea of raising tuition is good, if we get rid of all the subisdies and government intervention throughout the educational food chain.

[vince]

Is it possible that elite schools' nondiscrimination policies are responding to the fact that there is far less demand for their graduates' services (as distinguished from demand for the social cachet of an elite credential) than their graduating class sizes would imply?
If there were no chromosomal divide, with its ideologically uncomfortable skill/preference distinctions, wouldn't optimum graduating class sizes be lower? I think so. So aren't these policies working well if the underlying agenda is to either maximize the sizes of elite schools' faculties and administrations, or to provide continuing market opportunities for second and third tier programs that sevice the "non-elite"?

[Dude]

Jack Shafer at Slate.com has already debunked this as another unsubstantiated "trend" article. There's been an irritating spate of these from the Style writers.

[Tom]

Regarding Jeff's point above, I don't think anyone doubts that the benefit to the individual (and the individual's family) is greater. Posner specifically mentions reducing marital search costs and marrying a person with a higher expected income.

However, against the benefit to the individual the benefit to society is less by lowering the supply of capable workers in a given profession, and thus increasing the price.

The situation is particularly interesting if we think about public education, where the state is subsidizing all or part of the tuition.

An alternative, or maybe not an alternative but a caveat, to Posner's theory is conditional scholarships rather than higher tuition. If a student finances her own education privately, she should be able to do whatever she wants with that education, including not using it formally. However, scholarships should be reserved for those who are going to pursue a career with the education they are given.

I think the same holds true re: public universities. Admission should be contingent on an agreement that the student will work the degree for a set number of years.

[R]

"Admission should be contingent on an agreement that the student will work the degree for a set number of years."

You don't really think this is true, do you? The rebates program makes some sense, if we think that the loss of workers is a significant problem. But what can be gained from a policy that forces people to work in a profession that they have found they dislike and/or have little aptitude for? There is information that you cannot get without having actually practiced in the field -- if that information tells you to do something else, it benefits nobody for you to ignore it.

[N.E.Hatfield]

Just one question, that woman who graduated from Harvard and went on to Yale Law and then the career of mother and attorney, was this a concious veiled reference to Hillary?

People will probably call me archaic and sexist, but there is something to be said for division of labor and specialisation of labor based on gender. It is a biologic-cultural reality even at the "elite schools" and among the "elite classes". Maybe there is something basic and fundamental about it that cannot be overcome.

[nate]

somewhat related to this topic:

http://macroblog.typepad.com/macroblog/2005/08/more_on_labor_m.html

It would be interesting to look at a graph of labor force participation rates for 1) men and 2) women. The graph would report the % of people age 25-64 that are working, 1960-2005. It it were possible to look at it by level or type of education, it might also be interesting.

The graphs for men and women might look a lot different. It might be nice to discuss or explain this a little bit.

Anecdotally, I see lots of working moms today. There are a lot of programs for working moms in corporations. Not making lists of employers that are friendly to woring moms is not good. There are all kinds of things for working moms today that possibly did not exist 30 years ago. Employers are very accomodative to moms (work at home, flex time).

http://www.workingmother.com/mainstory.html

[nate]

there was an inadvertent typo in my previous posting:

"working" not "woring"

[nate]

labor force participation rates for men at Professor DeLong's blog:

http://delong.typepad.com/sdj/2005/07/four_out_of_fiv.html

[matt]

"However, scholarships should be reserved for those who are going to pursue a career with the education they are given."

So, all scholarships are to be awarded retrospectively? Then, what about liberal arts colleges (though colleges which predominantly make up the "elite" schools)? For instance, is an English or History major who goes on to law school and practices law "pursu[ing] a career with the eduction they are given[?]" What about a Music major? You get the point.

The problem is a practical one. Many students choose a major because they are required to do so. As a graduate of an "elite" liberal arts college, it more than obvious at these schools that academic interests are one thing, entering the work force in a chosen profession quite another. To only subsidize that very, very low percentage of students who enter a field directly using their undergradate degree (or graduate degree, provided, according to your terms, it is sufficiently similar enough to their major), would do a disservice not just to those students individually, but to all liberal arts students who are subscribe to a pedagogy of lifetime learning.

That said, I tend to agree with N.E. Hatfield both in principle and in disclaimer. But that may be more of a cheap way out of this argument because I don't have my own proposal.

[Eloise]

Rebates are a cute idea, but if they don't account for more of the externalities they'll just end up skewing the calculus even more. The cost of making the rebates fairer (and so, inevitably, more complicated) could easily swamp their benefits. If you want more women to work despite being married with kids, it'd be easier to just get rid of the "marriage penalty" tax.

BTW, the trackback function on this blog doesn't work. If you're interested, I did a follow up post at http://spitbull.blogspot.com/2005/09/half-time-show.html

[Tom]

Re: R and Matt's comments on my previous comments.

I didn't intend to convey the idea that the student had to work in a profession associated with the degree he or she received. Any job will do. So, a person who got a music degree could go to law school and satisfy the requirement.

Re: scholarships being given retroactively. Don't be snarky. Obviously the scholarship would be given same as always, but the student would have to pay it back if he or she chose not to work, at all, in any field of his or her choice.

[Tom]

Re: R and Matt's comments on my previous comments.

I didn't intend to convey the idea that the student had to work in a profession associated with the degree he or she received. Any job will do. So, a person who got a music degree could go to law school and satisfy the requirement.

Re: scholarships being given retroactively. Don't be snarky. Obviously the scholarship would be given same as always, but the student would have to pay it back if he or she chose not to work, at all, in any field of his or her choice.

[Tom]

And, as a side note, my scholarship proposal is not completely unheard of. The Golden Apple Scholarship currently follows a similar paradigm.

Although I am not really that well versed on the details, students get a scholarship in return for agreeing to teach in the inner city.

[David]

I think Judge Posner misses (or intentionally avoids) the true point of the NYT article: what this trend means for feminism. That's a much more interesting question than whether ivy league schools need to adjust their tuition a bit to compensate for "lost" donations (as if they were "owed" those donations in the first place, when the professional schools charge students $30k/year and then treat them with all the respect given lab rats, until it comes time for "donation" season).

I am not an expert on feminist theory, but I think the argument goes something like this. The pioneers of the women's lib movement in the 60s and 70s opened doors for women that were unprecedented and gave them the opportunity to, finally, become part of the power structure of America, both in the corporate world and in goverment. Those positions of power are reserved, largely, for graduates of the elite institutions. Those pioneering women who opened the door for all women feel, understandably, that women with such opportunities have a responsibility to exercise their potential. By giving up those opportunities to stay home and raise a family, the argument goes, they are doing something profoundly destructive -- they are setting back the cause of women's rights, undermining the gains made by those women who sacrificed their own personal lives to even the playing field.

I understand the feminist backlash at today's generation, which often takes for granted the gains that have been made over the past 30 or 40 years. But I think that, as an argument, the backlash is ultimately unconvincing. Conquering discrimination was, and continues to be, an important goal. However, no individual "owes" his or her life to a cause. A Harvard Law grad who wants a personal life has every right to that life, even if it means that he or she might not fulfill their professional "potential." There are many lawyers who could be, perhaps, chief justice of the supreme court if they dedicated every waking moment to the law. But many of them want to go home at a reasonable hour and spend some time with their kids. There is nothing wrong with that. Similarly, a Harvard Law grad has the potential to make millions at a large law firm, but he or she might sacrifice some of that money for a job that offers more intersting work, better hours, or both. That is a deeply personal decision, and it is not society's business, or that of his alma mater, what he decides.

A broader point here is that the professional world has become, in many ways, anti-family. Lawyers and doctors, especially, are expected to work absurd hours and are paid, in return, absurd amounts of money. But this leaves many of them unsatisfied on a personal level. It also destroys marriages and creates entire generations of kids raised by nannies. I am not surprised that many bright, successful people are not satisfied with this life. Perhaps the professions need to reform themselves to become more accommodating to families. After all, families are the backbone of our socieity. Rather than lash out at women (or men) who take time off to raise their kids, academics -- feminists and otherwise -- should take a long, hard look at what the legal profession has become. They might not like what they see.

[TheWinfieldEffect]

Posner signs onto the agenda of pursuing the objective to "open up places [at elite professional schools] to applicants who will use their professional education more productively; they are the more deserving applicants."

There is little to quibble with here. Law schools already subsidize public interest work and the legal profession incentivizes pro bono work. If the legal profession and legal academia prioritize productivity, because lawyers do good things and the more highly qualified the lawyer, the better s/he is at doing good things, then we should promote our best lawyers, whether male or female, to do good things. I see nothing wrong with mandating that entrants to law schools commit to performing pro bono work or to working for a minimal number of years, 5, 8, whatever, so long as it isn't, say, 15. This will also work to reduce the quantity of lawyers, which is always a good thing.

[garygech]

I am interested in the same concepts you raise. Originally I thought about three fundamental ways we evaluate a process. The first is apparent and primarily legal, that of logic. The second way, follows from the first, which is rational. The world of economics is more rational than logical. The third way I thought about for a long time, and that is emotional. The emotional context of a decision interacts differently.

But recently, I realized a fourth way to think. This way explains the success of many decisions that are counter intuitive.

Consider accepting an applicant to professional school.

Logically, the best person should be accepted. There is a standard for review, based upon various policies and recently confirmed by the Supreme Court in the Michigan decision.

Rationally, a school should Pareto optimize its applicant pool by choosing a portfolio of people that they hope would be successful. Obviously, you cannot choose all people.

Emotionally, a school should do what is in its best interest of the decision makers at the time, which usually focuses on the interests of the faculty making the selection process.

But in terms of relationships, the school should focus on maximizing the size of the endowment and prestige. Beyond any particular person or interest, the school will go on.

This explains why schools must be flexible with their policies. Harvard is starting to learn that it is hard to challenge the US Military and still get your valuable grant money. Yale has been complaining about a whole variety of issues related to the faculty, but quite frankly I found the student culture quite uncompelling when I visited my brother.

At Stanford, I thought the selection process was quite fair. There were many women in the class.

Now I have to say one thing, that will surprise everyone. At Wharton, the women are down right beautiful. Wharton by far has the best looking women of any elite graduate school. If you would say this at Yale, they would call you sexist but at Wharton, they would call you honest.

I have to give credit to the selection committee at Wharton for accepting so many beautiful, intelligent, and friendly women.

I think this seems to follow the rule Pareto set forward as the 80/20 rule. It seems quite remarkable that Wharton has 80% of the beautiful women that attend elite business schools in this country. The other 20% are evenly distributed.

If you don't believe me, visit the school.

[R]

"the legal profession incentivizes pro bono work."

Not the legal profession I work in. Some law firms speak well of it, provided that you meet your regular billable requirements, and that's about as good as it gets.

"I see nothing wrong with mandating that entrants to law schools commit to performing pro bono work or to working for a minimal number of years, 5, 8, whatever, so long as it isn't, say, 15."

Why not 15, if 8? Since you think that the state is better equipped to determine how a person should devote his or her own labor for 8 year, why not 15, 20, 30 years?

And how would it improve the quality of legal service to force people to work in the profession who do not want to? Do you expect people who are forced to perform a job to work very hard at it?

Finally, how would it reduce the number of lawyers? Do you think it would deter people from entering law school? The number of people it deters would be less than the amount of people who are forced to remain in the profession, I would guess.

As suspected, Winfield, it turns out that you are not the free market proponent you pretend to be.

[Crank]

I disagree with Judge Posner's premise that there is a "labor market distortion" in the number of law school graduates who do not spend full careers as practicing attorneys. This assumes that there is an unmet demand for lawyers, when I suspect that the opposite is true. In fact, I would argue that this "trend," to the extent supported by the evidence, is a positive one:

1. Law schools attract way more people than the number of lawyers who are needed to contribute to the common good. This is for a number of reasons, familiar to anyone who has spent time with law students or recent law school graduates - people go to law school for the prestige or not having a better idea of what to do, and they wind up getting tracked into the profession by a combination of debt, non-monetary sunk costs, and peer pressure.

2. A surplus of lawyers is a bad thing, particularly because unlike other businesses, lawyers have a number of ways to enlist the coercive machinery of government to enable them to make a living without their being much in the way of independent demand for their services. In particular, the number of lawyers is a primary driver of the number of lawsuits, especially class action and/or contingency fee lawsuits where no client needs to be persuaded to pay (except as a proportion of what, in a marginal case, may be seen as a windfall recovery) for the lawyer's services.

3. How to fix the imbalance between an excess supply of lawyers and the market's relative inability to discourage prospective law students from entering an overcrowded field? Fortunately, the solution presents itself: if some number of spots in law schools are being taken by women who will have short or part-time legal careers, instead of men who will practice full time, the surplus is partly corrected.

[WB]

What about the idea that, if graduate schools cease to ration their spots based on ability but instead charge what the market will bear, then the people going to law schools and business schools will be the slow-witted offspring of rich parents, and the "external benefits" of which you speak will not be captured.

I suppose the market might be able to correct this by making more loans available, but someone of modest means and superlative ability would probably hesitate to go $1M in debt just for a shot at a decent law or business career after 3 years of school.

[Tom]

I think we've talked about college, professional school and elite professional school without making the proper distinctions. I've done it too above.

With regard to elite professional school, I think all those spots should go to people who want to practice (or teach). Those graduates have the best training and should use it. Moreover, they take the place of someone who want to be practicing.

Regarding the force labor problem above, if we limit the discussion to elite professional school, I think the problem diminishes. If a student has the slighest inclining that they don't want to practice law, then they shouldn't except the invitation to study

[Tom]

(sorry for the cut off)

Anyone who wants to study a profession but not practice can go to a less-competitive school, and not worry about being forced to do a job they don't like.

[R]

"If a student has the slighest inclining that they don't want to practice law, then they shouldn't except the invitation to study."

This is silly. Most incoming professional students have no way of knowing whether they will enjoy, or be any good at, practicing the profession they are planning to study. But they might turn out to be very good at something else.

"Anyone who wants to study a profession but not practice can go to a less-competitive school, and not worry about being forced to do a job they don't like."

So you would only designate, say, the top five schools for a forced labor requirement. Isn't your aim more easily acheived by in the current system, where students from those less competitive schools can replace the students in the more competitive schools who drop out of the work-place?

We (you) have made up a problem here, and then composed inane solutions for the non-existent problem. There is no shortage of professionals in this country. To the extent that there is a shortage of medical doctors, it is due to the fact that there are fewer medical schools than other professional schools, which is in turn due to the fact that medical schools require more capital expenditure.

Schooling is only part of the equation in any profession, and the market bears out that truth.

[Anna]

I imagine that Posner's proposed policy might result in wage distortions for elite college grads, perhaps in turn creating a slight disincentive to attend a top school - even for those candidates who wish to pursue a lucrative career.

[Tom]

R.--

I don't really think it's that big of a problem, either. It's an interesting thought experiment. I certainly didn't make it up, as you say in your post.

The question is not, at least to me, is the current system working. It is. Should we all just post comments which say "Current system is good." That's not really very interesting. At the very least, I'd like a post on why the current system is better than any of my, or anyone else's, inane solutions.

The interesting question to me is how can we get the best education to people who most want to practice in a given profession. It's not about just correcting for shortages, but raising the quality of the profession overall. Yes, of course, education is only part of the professional equation, but it's still important.

Posner suggested raising the barriers to entry through higher tuition. I suggested (above) making scholarship money contingent on practicing a certain number of years or that money has to be paid back, and later added that it makes the most sense in the elite professional school context.