The Signaling Effect of Rankings: Evidence from Top 14 Law Schools (thesis)

Abstract

This thesis examines the effect on career outcomes caused by placing within the top 14 spots on US News & World Reports' law school rankings. We use data from the American Bar Association on class profiles, Bar passage rates by law school, and graduates' careers ten months after graduation. We utilize value-added modeling to calculate how schools perform after accounting for innate abilities (measured by median LSAT scores and undergraduate GPA) and characteristics of their students. We then use a regression discontinuity design to calculate the causal impact of being in the top 14 on school value-added. We find that schools just inside the top 14 increase the likelihood of sending their students to big law firms by approximately 26 percentage-points more than schools just outside of the top 14. No statistically significant discontinuity is found for Bar passage rates, employment rates, or federal clerkship placement. We conclude that graduating from a top school signals a lawyer's innate ability, as the increase in likelihood of Big Law employment from attending a top 14 school is above the human capital development that is implied by the increased likelihood of Bar passage.