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Administrator compensation: approximately 10 percent more per year of education

“Evidence suggests that, up to a point, an additional year of schooling is likely to raise an individual’s earnings about 10 percent” (NYTimes, Dec. 11, 2005 at BU6). I wondered whether this holds for law departments, so I did some calculations on data from 1998 for 90 law department administrators.

Those with a high school degree only (5 administrators) reported compensation that averaged $50,500. With two more years of school (13 who attended junior college or did not graduate a four-year college), the average was $64,600. Completing college, which 31 did, resulted in average comp of $74,400. With another two years for a graduate degree, the average rose to $87,500; those 15 administrators with an MBA or JD reported average compensation of $98,500.

Based on this data for legal department administrators and office managers, moving from 12 years of schooling to 14 increased average compensation 28 percent, about 14 percent per year. Two more years of education after college increased average compensation about 18 percent, which means 9 percent per year of additional schooling. Getting a business or law degree rewarded these administrators, on average, with only about 6 percent more per year. The returns diminished steadily as these administrators stayed longer in school, but even at the top end, the net present value over a career must handsomely repay the investment and opportunity cost.

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