Student Debt’s Disproportionate Negative Effects on Female Lawyers

A new study from the University of Pennsylvania and Ryerson University shows that student debt from law school, combined with recently stagnant median first-year salaries, can negatively influence career choices and partner prospects for new female lawyers.

According to economists Holger Sieg of Penn and Yu Wang of Ryerson, student debt for new lawyers has an asymmetric effect: women with more student debt are more likely to stay in private-sector jobs, to postpone marriage, to marry partners who have lower earnings and to delay having children than male lawyers who have similar student debt loads. Dr. Sieg is the J. M. Cohen Term Chair in Economics at Penn as well as a research associate at the National Bureau of Economic Research and at Penn’s Population Studies Center and Dr. Wang, Gr’16, is assistant professor of economics at Ryerson.

“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,” Dr. Sieg said. “For women, we found it’s a lot more problematic.”

The researchers studied two datasets—one from the American Bar Association and the National Association for Law Placement and one from the US Department of Education—to create a long-term picture of the choices made by 1,300 female lawyers, including which law school they attend and what job they take post-graduation.

Upon noticing the gender disparities, the researchers built a model to work toward applying potential solutions such as a loan-forgiveness program or weighted subsidies dependent on base salary. 

“You are accomplishing similar objectives, but you make working in the public sector more attractive,” Dr. 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.”

They found offering complete loan forgiveness in a decade does not change the gender disparity; instead, successful programs provide annual incentives that vary from paying a higher salary to dropping a percentage of the debt. This lowers the entry barrier to working in the public sector.

The research could be applied to other sectors with public policy components, such as business or medicine.