30 June 2016

Fewer Households Own Guns, But Those Who Do Own More Guns

The percent of American households owning guns is at a near-40 year low in the latest CBS News poll released this month.

According to the survey, which was conducted among 1,001 Americans in the aftermath of the Orlando nightclub shooting, 36 percent of U.S. adults either own a firearm personally, or live with someone who does. That's the lowest rate of gun ownership in the CBS poll going back to 1978. It's down 17 points from the highest recorded rate in 1994, and nearly 10 percentage points from 2012.

Different national polls tend to show slightly different rates of gun ownership. The latest household gun ownership rate in the General Social Survey, in 2014, was 32 percent. The October 2015 Gallup survey showed a higher rate of 43 percent, including guns kept on property outside the home.

But the downward trend in gun ownership remains consistent across the national polls. According to Gallup, gun ownership has fallen by about 10 percentage points since its peak in 1993. The General Social Survey shows a 20-point drop since the mid-1970s.

But gun purchases, as measured by FBI firearm background checks, are at historic highs. And data from the Bureau of Alcohol, Tobacco and Firearms shows that gun manufacturers are churning out record numbers of guns. Many gun rights advocates argue that these figures mean that the overall number of gun owners is growing: If more guns are being sold, more people must be owning guns.

But the declining rates of gun ownership across three major national surveys suggest a different explanation: that most of the rise in gun purchases is driven by existing gun owners stocking up, rather than by people buying their first gun. A Washington Post analysis last year found that the average American gun owner now owns approximately eight firearms, double the number in the 1990s.

Other research bears this out as well. A 2004 survey found that the average gun owner owned 6.6 firearms, and that the top 3 percent of gun owners owned about 25 guns each. More recently, a CBS News poll taken in March of this year found that roughly 1 in 5 gun owners owned 10 guns or more.
Via the Washington Post's Wonkblog.

In accord, see this New York Times story from March 9, 2013 noting a four decade decline in gun ownership rates and this Pew Study.

Another trend which the story above doesn't mention but which has been reported elsewhere, is that a lot of the decline in the percentage of households that own guns involves the decline in the popularity of hunting (also here) and a not unrelated migration of rural populations to suburbs and urban areas. See, e.g. this Pew study:

Thus, the decline in gun ownership is likely concentrated among households that once owned a hunting rifle or a shotgun, but moved from a rural area to the suburbs or city and no longer hunt anymore.  Hence, the decline in gun ownership is probably much more marked in the case of long arms than in the case of handguns.

But, at least some of the decline may also be due to changing sentiment among urban and suburban dwellers about the merits of owning a handgun for self-protection, particularly has plummeting crime rates in urban areas have reduced the daily exposure to a risk of violence that many poor urban people face.

29 June 2016

A Couple Of Musing On Uncertainty Civil Litigation

* One of the primary sources of expense in civil litigation is disclosure and discovery practice in which, prior to a trial, litigants are required to produce documents to each other, to answer each other's questions, and to present sworn recorded testimony outside the presence of a judge in what is called a deposition.

A major driver of this cost is uncertainty over what factual issues are in dispute and are relevant to the claims and defenses asserted in the action.  As a result, in practice, discovery is permitted on almost all factual issues related in any way to the case.

Much of this uncertainty could be resolved if a judge intervened early in the case to adjudicate which factual issues are really relevant under a correct interpretation of the law (which in practice tends to be profoundly uncertain in all but the simplest of cases) and to force parties to be reasonable in their claims that relevant factual issues really are disputed in ways that are material to the outcome of the case.

And, of course, it discovery were actually limited to issues that have been authoritatively determined to be legally relevant and to be genuinely disputed, there would be vastly less discovery and civil litigation would be profoundly less expensive.

One of the main virtues of the European civil law system over the American common law system of civil litigation is that the European system does a much better job of this task.  The American system with its often illusory promise of a jury trial or jury-trial equivalent bench trial at the conclusion of a case, in contrast, is very adverse doctrinally to addressing any issues of this kind before dealing with all of them.

* The "black letter law" as enunciated by statutes, regulations, court rules and appellate case law is highly relevant and can often be applied to particular facts by judges in a manner that would be almost unanimous despite the fact that the judges differ greatly in their judicial philosophies and political inclinations.  

But, it is also not at all uncommon for judges to make rulings that depart from that black letter law, either by clearly misapplying it to the facts or by accepting clearly erroneous interpretations of it. This happens perhaps 40%-45% or more of the time in any case that isn't totally straight forward (at least on the civil side, I have no practical experience as a criminal law attorney), and perhaps 10%-20% of the time, these errors are outcome determinative.

(Juries also make mistakes in applying the law with which they are instructed that creates uncertainty, but the kinds of mistakes that juries make have causes and solutions that differ profoundly from those made by judges.  The best available evidence suggests that error rates in criminal cases that go to trial on the issue of guilt or innocent are about 10%, but the decision facing juries in criminal cases are usually much less complex than in civil cases, so the error rate in civil cases is probably higher.)

Certainly, this not uncommon disconnect between the black letter law as applied to the facts and actual outcomes is the reason that going to trial is routinely described as "rolling the dice."

Yet, the practical reality is that it is profoundly more expensive and time consuming to win on appeal (which itself has a similar level of error) and often it is simply impossible to obtain redress from an erroneous trial court decision.  

For example. it is very rare that a tenant who loses an eviction action, or a debtor who loses a collection action, will be able to obtain any meaningful redress by appealing a decision, not least because staying a trial court decision requires that the tenant or debtor post a bond equal to the amount of the judgment entered (generally including the other side's attorneys fees).

The body of legal theory that examines systematic patterns in the way that judges deviate from the black letter law is called "legal realism."  And, while legal realism was vibrant in its heyday in an era when empty legal formalism had gotten out of control, this kind of legal scholarship, particularly when informed by empirical data, both receives too little attention among legal scholars and receives too little attention in the law school curriculum.

This is a shame, because truly effective real world lawyers need to not only know the "black letter law" but also know when and why and in what manner judges are likely to disregard or twist the black letter law when it is applied to particular facts.  

Too often, legal realist scholarship gets so hung up on establishing at all that judges do in fact frequently fail to honor the black letter law, that they never manage to take the next step of synthesizing that reality into theories that explain when, why and how this is likely to happen, so that lawyers can incorporate this deeper empirical understanding of the relationship between the black letter law and the law as it is actually applied, into their practice.

27 June 2016

TODAY Is The Deadline To Cast Colorado Primary Ballots

Tuesday, June 28, 2016 is the final day to deliver you mail-in primary ballots to polling places in Colorado.  It is too late to mail these ballots.  But, there are many drop off locations near you. Primary ballots are distributed only to voters who are registered to vote and affiliated with a political party.

These ballots do not include a Presidential primary vote as Colorado's Democrats had a Presidential caucus and Colorado's Republicans denied its rank and file a say in the Presidential nomination process.

UPDATED with new title on June 28, 2016.

Plausibility Pleading Reaches Colorado

The Colorado Supreme Court today adopted the plausibility pleading standard of the U.S. Supreme Court cases Twombly and Iqbal in the case of Warne v. Hall by a closely split 4-3 margin.

It did so out of a desire to have harmony between the Federal Rules of Civil Procedure as currently interpreted, and the Colorado Rules of Civil Procedure which are modeled on the federal rules, despite the fact that Twomblyand Iqbal have been widely condemned and almost universally condemned as bad decisions that hurt legitimate plaintiffs in academic circles.

Justice Gabriel's dissent sums up the case against taking this step:
¶31 Today, the majority jettisons a rule that has stood the test of time for over fifty years, based largely on an asserted preference for maintaining uniformity with federal court interpretations of analogous federal rules of procedure. In reaching this result, the majority misperceives the existing state of the law in Colorado and grafts onto C.R.C.P. 8 a “plausibility” requirement that the rule does not contain and that other courts have correctly recognized results in a loss of clarity, stability, and predictability. Even more concerning, the majority’s preferred standard allows a single district judge, at the incipient stages of a case, to weigh what the judge speculates the plaintiff will plausibly be able to prove, based on the individual judge’s subjective experience and common sense, and then to decide whether the plaintiff’s action is viable. 
¶32 I cannot subscribe to such a standard, which I believe will deny access to justice for innumerable plaintiffs with legitimate complaints. Indeed, the majority’s application of its newly adopted standard in this case demonstrates the overreaching nature and ultimate unfairness of that standard.
But, the odious federal standard is now Colorado law as well.

23 June 2016

Waiting For Brexit Results

Polls close in England's Brexit vote at 3 p.m. Denver time.  Polling favors a "remain" vote, but by a narrow majority less than the polling margin of error.  A "leave" vote could have catastrophic consequences for Europe's economy and as a result, for the world economy.

UPDATE 10:00 p.m. Mountain Time: With 85% of the votes counted, 51.5% of voters have decided to leave the E.U., so the U.K. is almost certain to leave the E.U.  Now, all that remains are the ugly details and catastrophic global economic consequences of this decision.  The British pound has already fallen 11% on the early news and financial markets around the world are falling on the news.

UPDATE June 24, 2016: Charlie Stross has an excellent rant at his blog:
What happens to England and Wales now?

Short version: economic turmoil caused by the uncertainty. An upswing in right-wing xenophobia as the utterly odious crypto-fascist Nigel Farage makes hay while the Sun shines on his project. 
Divorce negotiations ...the Brexiters have been selling a lie; that they'd get a no-fault divorce and keep the house. Reality is somewhat less convenient and Brussels has no alternative but to play hardball if it is to deter other loosely-bound members from following England's example. Most likely England will end up losing the house, the CD collection, and the cat and having to sleep in the car.
There is much more worthwhile analysis in the rest of his post.

Remote Causes

There is a credible case to be made that Brexit, and quite likely Scottish independence and a renegotiation of the status of Northern Ireland and Gibraltar in its wake, all started in Tripoli.

Tunisia is where the Arab Spring started.  Arab Spring in Tunisia triggered a revolution in Libya that brought about regime change with assistant from the military of the U.S. and select allies in the form of missiles and air support and intelligence.  This and some anti-Assad statements gave rise to the Syrian Civil War.  The Syrian Civil War turned a modest flow of refugees into Europe into a historic flood.

The flood of refugees into Europe put pressure on the E.U. in its capacity as immigration union to share an immigration burden that would otherwise have fallen primarily on Greece and Italy alone, and that combined with terrorist incidents in Paris and elsewhere in Europe triggered anti-immigrant sentiment, fear, and dissatisfaction with the E.U.

Without a doubt, there was already a strong base of euro-skepticism in the U.K. that had developed over decades for myriad reasons.  But, when the ultimate "leave" vote margin was less than 2 percentage points, it is very likely that the change of events that started in Tripoli may have tipped the balance from "Remain" to "Leave" in yesterday's vote.

21 June 2016

Higher Taxes Don't Kill Economic Growth

It is well known that the U.S. economy and the federal government's fiscal health has been better under Democratic Presidents than under Republican ones.  At least at the extremes of Colorado and California vis-a-vis Wisconsin and Kansas, this is true of Democratic v. Republican Governors of states as well in recent history.
In 2012, voters in California approved a measure to raise taxes on millionaires, bringing their top state income tax rate to 13.3 percent, the highest in the nation. Conservative economists predicted calamity, or at least a big slowdown in growth. Also that year, the governor of Kansas signed a series of changes to the state's tax code, including reducing income and sales tax rates. Conservative economists predicted a boom. 
Neither of those predictions came true. Not right away -- California grew just fine in the year the tax hikes took effect -- and especially not in the medium term, as new economic data showed this week.

Now, correlation does not, as they say, equal causation, and two examples are but a small sample. But the divergent experiences of California and Kansas run counter to a popular view, particularly among conservative economists, that tax cuts tend to supercharge growth and tax increases chill it.

California's economy grew by 4.1 percent in 2015, according to new numbers from the Bureau of Economic Analysis, tying it with Oregon for the fastest state growth of the year. That was up from 3.1 percent growth for the Golden State in 2014, which was near the top of the national pack.

The Kansas economy, on the other hand, grew 0.2 percent in 2015. That's down from 1.2 percent in 2014, and below neighboring states such as Nebraska (2.1 percent) and Missouri (1.2 percent). Kansas ended the year with two consecutive quarters of negative growth -- a shrinking economy. By a common definition of the term, the state entered 2016 in recession. ...

Few, if any, economists would say today that the recovery has been sufficient for all Californians. But almost no one can say that raising taxes on the rich killed that recovery. Or that given a choice of the two states' economic performances over the past few years, you'd rather be Kansas.
From here.

UPDATE June 24, 2016:

Additional GPD data from Kansas and other states nearby confirm the story about the economic health of Kansas relative to its peers.  GDP in Kansas flatlined in the state relative to the U.S., to neighboring states and to the GDP growth trend lines it had been on, following the policy changes it made under Governor Brownback.  Colorado, meanwhile, under the stewardship of Democratic Governor Hickenlooper, has thrived.

Wisconsin's economy has similarly faltered following its implementation of a slate of conservative economic policies under Governor Walker.

14 June 2016

Federal Courts Swamped With Porn Pirate Suits

[T]he adult website Malibu Media is a prodigious enforcer of its copyrights. According to law professor Matthew Sag of Loyola University in Chicago, Malibu alone was responsible for nearly 40 percent of all copyright filings in federal court in 2015. Litigation against anonymous downloaders, by Malibu and other copyright enforcers, made up nearly 60 percent of the federal copyright docket last year
From a Reuters article discussing the similar failed business model of the law firm Prenda Law, which died in a hail of court sanctions for unethical conduct.

Since porn websites routinely give away vast amounts of product for free, it isn't unreasonable to guess that these sites make more money suing infringers than they do from paying customers.

I have long advocated conceptualizing copyright suits as a form of unjust enrichment lawsuit, rather than one involving copyrights, and limiting damages to actual damages as measured by an unjust enrichment principle.

13 June 2016

Qatar Is Still A Barbaric Place Where Women Are Prosecuted For Reporting Rapes

It happens routinely, most recently to a Dutch woman and before that to a Norwegian woman, because Qatar is a backward country with oil wealth and a medieval way of life that would collapse without oil dollars from the West.

Of course, all of this is done in the name of Islam, which, as practiced in Qatar and many countries nearby, is a cruel and dangerous cult that stands in the way of an semblance of progress, decency or justice. In short, it is a lot like fundamentalist Christianity in the United States.

12 June 2016

The Pulse Nightclub Massacre In Orlando, Florida

As I write the carnage consists of 50 people were killed and 53 hospitalized after Omar Mateen, a U.S. born Muslim man from an Afghani family who had been employed for years as an armed security guard in Florida, shot them with an assault rifle near the 2 a.m. Sunday closing time at Pulse Nightclub in Orlando, Florida, a gay dance club.  He made a 911 call pledging allegiance to ISIS before making his shooting spree and eventually being killed in a barrage of gunfire from 11 law enforcement officers following a three hour hostage situation that persisted until 5 a.m. local time.  Not long before the incident, according to his father, he'd expressed disgust at seeing two men kissing in Miami, Florida.  He had a history of domestic violence with his ex-wife although it isn't clear that charges were ever filed.  It is the most deadly mass shooting in U.S. history.

In an apparently unrelated incident a man heavily armed with guns and explosive was intercepted and arrested in greater Los Angeles en route to a gay pride parade there within the last day or so.

These incidents are all too common.  9News lists a few of the most notable incidents:
• April 16, 2007: Seung Hui Cho, a 23-year-old student, went on a shooting spree at Virginia Tech in Blacksburg, Va., killing 32 people, before killing himself. 
• Dec. 14, 2012: Adam Lanza, 20, gunned down 20 children and six adults at Sandy Hook Elementary School before killing himself. 
• Oct. 16, 1991: George Hennard, 35, crashed his pickup through the wall of Luby's Cafeteria in Killeen, Texas. He shot and killed 23 people before committing suicide. 
• July 18, 1984: James Huberty, 41, gunned down 21 adults and children at a McDonald's in San Ysidro, Calif., before being killed by police. 
• Aug. 1, 1966: Charles Joseph Whitman, a former U.S. Marine, shot and killed 16 people from a university tower at the University of Texas in Austin before being shot by police. 
• Aug. 20, 1986: A part-time mail carrier, Patrick Henry Sherrill, shot and killed 14 postal workers in Edmund, Okla., before killing himself. 
• Dec. 2, 2015: Syed Farook and Tashfeen Malik, a married couple living in Redlands, Calif., opened fire at a San Bernardino County Department of Public Health training event and holiday party, killing 14 people and injuring 22 in a matter of minutes. Farook, an American-born U.S. citizen of Pakistani descent, worked at the health department. Malik had pledged allegiance to the Islamic State in a Facebook post before the shooting.
• Nov. 5, 2009: U.S. Army Maj. Nidal Hasan fatally shot 13 people and injured 30 others at Fort Hood near Killeen, Texas. Hasan, a psychiatrist, appeared to have been radicalized by an Islamic cleric. He was convicted and sentenced to death. 
• Sept. 16, 2013: Gunman Aaron Alexis, 34, fatally shot 12 people and injured three others at the headquarters of the Naval Sea Systems Command in Washington, D.C. He was later killed by police. 
• July 20, 2012: James Holmes gunned down 12 people in an Aurora, Colo., movie theater. Last year he was convicted of first-degree murder and attempted murder and sentenced to 12 consecutive life sentences plus 3,318 years without parole. 
• Oct. 1, 2015: Christopher Harper-Mercer, a 26-year-old student at Umpqua Community College near Roseburg, Ore., shot an assistant professor and eight students in a classroom. After a shootout with police, he committed suicide. 
• June 18, 2015: A gunman opened fire at a weekly Bible study at the Emanuel African Methodist Episcopal Church in Charleston, S.C. Nine people were killed, including the pastor Clementa Pinckney; a 10th victim survived. The morning after the attack police arrested a suspect, Dylann Roof, 21, who said he wanted to start a race war. Laywers for Roof, who was charged in the rampage, last week filed papers seeking to waive his right to a jury trial. 
• July 16, 2015: Muhammad Youssef Abdulazeez opened fire on two military installations in Chattanooga, Tenn. The first was a drive-by shooting at a recruiting center; the second was at a U.S. Navy Reserve center. Four Marines and a Navy sailor died; a Marine recruit officer and a police offer were wounded. Abdulazeez was killed by police in a gunfight. 
• Nov. 27, 2015: A gunman attacked a Planned Parenthood clinic in Colorado Springs, Colo., killing a police officer and two civilians and injuring nine others. Robert Lewis Dear was taken into custody after a five-hour standoff and charged with first-degree murder.
The bottom line is that a status quo where these kinds of incidents are not only possible, but routine, illustrates the need for change.

We need to repeal the Second Amendment.

We need to get America's vast arsenal of small arms off the streets, out of homes and out of businesses.

We need to prioritize a system to pro-actively identify armed people with a history of domestic violence or other violent crimes or mental health issues, and disarm them promptly, because prevention is the only viable means to address mass shootings - essentially 100% of the shooters are promptly kills or incarcerated in prison or mental health facilities for life.  Anyone should be able to notify authorities of an alleged violent or mental health incident, and anyone on that list should be notified and required to clear himself or herself by clear and convincing evidence if he or she wants to continue to own or buy or possess a firearm.  The potential harm justifies erring on the side of caution.

Civilians who are openly carrying firearms in a municipality should be shot by law enforcement officials on sight, no questions asked.  Openly carrying a firearm transmits a powerful non-verbal threat to kill anyone in sight. A civilian openly carrying a firearm in a municipality is pretty much by definition a violent criminal.

Big Time

You know you have hit the big time when you can put the title "Vampire Queen" on your business card.

11 June 2016

I Voted.

I cast my Democratic party primary ballot in Denver today.  Election day is June 28, 2016, but the election is conducted by mail and anyone entitled to a ballot can cast it at any time after it is received and before election day.

This year's short ballot featured a three way primary race for Denver DA, with the primary winner almost sure to beat a Republican opponent in the fall, a contested race for the 1st Congressional District CU-Regent nomination which will also almost surely determine the winner in the general election, and a primary challenge to incumbent Congresswoman Diana DeGette that is almost certain to fail and to be followed by her re-election.

05 June 2016

Very Particular Tastes

Life in the 21st century rocks!

Seriously, when else could you access a whole sub-genre of South Korean contemporary vampire fiction in translation?

03 June 2016

Trump Still Openly Racist And Justice Moore Still Delusional

Trump's comments about a U.S. born, Mexican-American judge presiding over a lawsuit in which his Trump University is credibly accused of fraud, show that he is such a racist that even Paul Ryan, the Republican speaker of the U.S. House of Representatives felt compelled to call him out for it unprompted, just a day after endorsing him.

In other news, Alabama Supreme Court Chief Justice Moore is on the record as saying that the First Amendment protects only Christians for reasons that are crazy and would earn an automatic "F" on any law school exam.  He was removed from office in 2003 for defying the U.S. Supreme Court, re-elected in 2012, and is currently in the process of being removed from office again for defying the U.S. Supreme Court again.  It is appalling that men live Justice Moore hold any public office or are allowed to remain as members of the bar.

Coal Industry Employment Virtually Irrelevant In Colorado

There are seven operating coal mines in Colorado.  The largest, which produces more than half of the coal produced in the state, employs about 300 people, but its bankrupt owner is laying off 80 of them due to a collapse in the coal market that has been a long time coming as utilities have shifted to cleaner fuels as a result of a long standing inherent defect in the product mined.

By comparison, bankrupt sporting equipment retailer Sports Authority is laying off more people at its Englewood, Colorado headquarters alone, than the coal industry employed in the entire State of Colorado before the latest round of layoffs.

Colorado's civilian labor force as of April 2016 was 2,888,800.

Admittedly, coal mining jobs are good paying jobs, particularly for workers who typically lack a college education.  But, there aren't a whole lot of them and rest of the profits generated from the mines net of their labors and state taxes mostly go to multi-national publicly held companies (or bankruptcy trustees for multi-national bond creditors), rather than supporting the Colorado economy.

School's Out, Drive Safe

Today is the last day of school before summer vacation for most of the 70,000+ students who attend the Denver Public Schools.  They are now on the streets of Denver for the summer.  Drive carefully.

It is also National Donut Day.  Enjoy!

CNN meanwhile, is intent on passing on the news that northern Alaska is cold, especially in the winter.  Who knew?  Who needed to know on Friday, June 3?

02 June 2016

For Profit Vocational Education Has Negative Value

The notion that the for profit sector is always better in quality and value than the governmental sector is patently false when it comes to higher education.

Public community college vocational programs materially improve their students' economic well being, but comparable for profit vocational programs, with narrow exceptions, actually leave students less economically well off than they were before starting the programs.
Students who earned vocational certificates from for-profit colleges made an average of $900 less annually after attending the schools than they did before, according to a new study, leaving those who took out loans hard-pressed to pay them back. By contrast, students who received similar certifications from public community colleges earned $1,500 more than they did before attending school. . . .
The discrepancies are even more striking because students at for-profit colleges are more likely to complete their programs. For those who finish, the advantages of having attended a community college are even greater. 
A major exception was cosmetology, in which for-profit schools seemed to do modestly better for their students. Cosmetology is very popular at for-profit schools – about 19 percent of students seeking certificates at a for-profit school were in a cosmetology program in the federal data. (Various medical programs accounted for much of the rest.) . . . .

The disparities in earnings between for-profit college students and community and community college students were especially pronounced for men, who made nearly $2,200 more on average each year after attending a public community college than they had before.
It isn't clear how much of the gains in earnings from for profit cosmetology programs are consumed with excessive for profit college tuition bills, particularly relative to the gains received from such programs at public community college programs.  Non-medical vocational programs produce lower economic returns than medical ones to start with, and since both public and private cosmetology programs produce gains and the differences in the gains are modest, it may take many years for the additional for profit sector tuition cost to pay off.

Public community college vocational programs, in addition to conferring more value on students, are very inexpensive and pay for themselves with higher future earnings within the first year out of college. In contrast, for profit vocational programs which are more than 1100% higher, impose a crushing debt loan on students who have no economic gains.
The NBER paper analyzed data for 567,000 students who pursued vocational certificates at for-profit schools between 2006 and 2008. More than 4 in 5 of them carried student loan debt. Of the 278,000 who earned similar certificates from public community colleges, just 25 percent were indebted, adjusting for demographic differences between the groups. 
In 2014, the average tuition for certificate students at for-profit colleges was $8,118, compared with $712 for demographically similar students at community colleges. In 2014, average annual tuition at two-year, for-profit colleges was about $14,200, quadruple what students at community colleges paid.
It also bears noting that community college programs generally have the lowest per student government funding of any part of the public sector higher education system, which lavishes resources on flagship research universities, but gets stingier as one moves down the academic prestige scale.

The abstract of the study cited above states:
We draw on population-level administrative data from the U.S. Department of Education and the Internal Revenue Service to quantify the impact of for-profit college attendance on the employment and earnings of over 1.4 million students. We characterize both the within-student earnings effects and joint distributions of earnings effects and increases in student debt. Our descriptive analysis of degree-seeking students suggests that on average associate’s and bachelor’s degree students experience a decline in earnings after attendance, relative to their own earnings in years prior to attendance. Master’s degree students and students who complete their degrees appear to experience better outcomes, with positive earnings effects. Our difference-in-difference analysis of certificate students suggests that despite the much higher costs of attendance, earnings effects are smaller in the for-profit sector relative to the effects for comparable students in public community colleges—a result that holds for all but one of the top ten fields of study. In absolute terms, we find no evidence of improved earnings post-enrollment for students in any of the top ten for-profit fields and we can rule out that average effects are driven by a few low-performing institutions.
Another NBER paper from 2015 on returns to community college vocational education explained (emphasis added):
This paper estimates the earnings returns to vocational, or career technical, education programs in the nation’s largest community college system. While career technical education (CTE) programs have often been mentioned as an attractive alternative to four-year colleges for some students, very little systematic evidence exists on the returns to specific vocational certificates and degrees. Using administrative data covering the entire California Community College system and linked administrative earnings records, this study estimates returns to CTE education. We use rich pre-enrollment earnings data and estimation approaches including individual fixed effects and individual trends, and find average returns to CTE certificate and degrees that range from 12 to 23 percent. The largest returns are for programs in the healthcare sector; among non-health related CTE programs estimated returns range from five to ten percent.
The Obama Administration has taken meaningful steps to end wasteful government support for these for profit vocational programs, although perhaps not yet strong enough ones:
In 2014, Barack Obama’s administration instituted new rules limiting the amount of debt students can take on in career-training programs. Although no schools were named in the study, some of the biggest for-profit colleges – including DeVry University and the University of Phoenix – have faced federal lawsuits or investigations that suggested they deceived students about the likelihood of finding jobs in their fields of study and how much they would earn.
Basically, federal funds used for grants and loans to attend for profit post-secondary institutions are a waste of money that make both the students and the public less well off.

There are a handful of circumstances where for profit institutions do add value, and it turns out that Master's Degree programs at for profit institutions, like the for profit Master's Degree program in financial planning where I was once an associate professor, do add value.

The study also doesn't rule out the possibility that there may be a handful of for profit post-secondary institutions that do add value, but it is pretty clear that most, and in particular, most of the larger chains, do not.

OFF TOPIC BUT RELATED: A significant share of the benefits of higher education are due to sorting effects and attending and attempting to graduate from college is not a wise choice for everyone.  Also, a significant share of the benefits of higher education are in the form of better health outcomes rather than higher earnings.

Tall people make more money than short people, especially at low end jobs.

01 June 2016


An externality, in economics and law, is a harm caused by one person in the course of their activities that harms another who does not receive compensation for the harm.  Generally, externalities are bad for society because they cause activities to be carried out more frequently than they should because the people conducting the activity keep the benefits while making other bear the harms.

Usually, legal liability or a restructuring of the economic organization of the industry that conducts that activity are proposed to solve the externality.

The concept of an internality is an analogous concept.  An internality occurs when someone engages in a non-optimal level of an activity because they are predictably incapable of ascertaining the optimum level of that activity for the person's own well being.  These are the classic problems of behavioral economics.  For example, people may systemically save too little for retirement because the harm is in the future, while the benefits of not saving are in the present and the future is another country.  Other irrationalities are similarly more or less hard wired into humanity.

Usually, some sort of "nudge" that tweaks default rules while allowing a determined individual to exercise autonomy contrary to societal suggestions is suggested as a solution to internalities.