I’ve written before about the problem of law school, which is that students who go there take out gigantic loans despite the fact that there’s not so much demand for those degrees anymore.

But a recent study indicates that maybe it’s not so bad. According to new draft paper by Seton Hall Law Professor Michael Simkovic and Rutgers economist Frank McIntyre:

Given current tuition levels, the median and even 25th percentile annual earnings premiums justify enrollment. For most law school graduates, the net present value of a law degree typically exceeds its cost by hundreds of thousands of dollars.

After controlling for observable ability sorting, we find that a law degree is associated with a 60 percent median increase in monthly earnings and 50 percent increase in median hourly wages. The mean annual earnings premium of a law degree is approximately $53,300 in 2012 dollars. The law degree earnings premium is cyclical and recent years are within historic norms. …The mean pre-tax lifetime value of a law degree [is] approximately $1,000,000.

Simkovic and McIntyre don’t find that the law school earnings premium has deteriorated since the economy collapsed in five years ago.

So is law school actually a good idea? Not so fast.

As Jordan Weissman over at the Atlantic points out the major problem with the law school investment had to do with how graduates of lower-tier law schools fared in the economy:

Even if law-school graduates on the whole do reasonably well, the law-school boom of the last decade helped spur the growth of bottom-tier institutions that now post 20 percent or higher unemployment rates among their graduating classes. Those students may not be defaulting on their hefty debts en masse — unlike the dropouts who are most likely to default on undergraduate debt, law grads are good at using programs like income-based repayment to protect themselves — they’re still suffering. I don’t think there’s anything about Simkovic and McIntyre’s study that means something shouldn’t be done to fix or restrain those schools.

In general law school graduates might be slightly better off (according to Simkovic “at the median the value… is $330,000” extra in salary and benefits over the course of someone’s working life) than their peers with no graduate degrees, but a damn lot of them still have pretty bad jobs. It’s also possible the problem might still get worse; law firms are simply not at the size where they were before the Great Recession began, nor are they likely to expand again in the future.

But the new study is a very important contribution to this debate. Law school is perhaps no longer the easy ticket to financial stability that it seemed back when I was in college, but it’s not really clear that law-school is a straight-up bad investment.

Daniel Luzer

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer