How much should judges be paid? An empirical study on the effect of judicial pay on the state bench.

• Author: Anderson, James M.

INTRODUCTION I. BACKGROUND ON THE DEBATE ON JUDICIAL PAY A. Judicial Pay Affects the Composition of the Bench B. Other Common Law Countries C. Judicial Pay Affects Judicial Independence D. Conclusion and Identification of Testable Hypotheses 1. Composition 2. Behavior (including independence) II. OVERVIEW OF EMPIRICAL STRATEGY AND DISCUSSION OF DATA A. Measuring Exit B. Measures of Career Background C. Measures of Judicial Compensation D. Pensions E. Judicial Workload F. Opportunity Costs of Serving as a Judge III. THE EFFECTS OF JUDICIAL SALARY A. Specification 1. The impact of pay on entry into the judiciary 2. Specification for likelihood of exit B. Results and Discussion on the Composition of the Judiciary 1. The impact of pay on entry into the judiciary 2. Incorporating opportunity costs 3. Exit CONCLUSION A. Effects of Salary on Composition of the Bench B. Effects of Salary on Judicial Behavior APPENDIX INTRODUCTION

How much should judges be paid? Policymakers have long struggled with the issue of appropriate pay for judges. Plato warned of paying public servants too much for fear of encouraging men of selfish motivations to seek public office. (1) The Framers of the Constitution debated the issue and thought judicial salaries important enough to include the Compensation Clause, preventing Congress from reducing the salaries of Article III judges. (2) Winston Churchill argued that judicial pay should be increased because "[t]he Bench must be the dominant attraction to the legal profession." (3) More recently, Chief Justice Roberts of the Supreme Court has argued that inadequate federal judicial salaries are precipitating a "constitutional crisis" which "threatens the viability of life tenure." (4)

Others are less convinced. Dahlia Lithwick noted that commentators across the political spectrum were skeptical of Chief Justice Roberts's claims that judicial salaries were causing a constitutional crisis. (5) Economists have argued that it is optimal to pay judges less than they would make in the private sector. (6)

Almost all of the commentary on judicial pay has implicitly assumed something about the sensitivity of prospective or current judges to changes in pay. For example, the claim that low judicial pay harms the quality of the judiciary assumes that the composition of the bench is systematically influenced by pay. Claims about the effect of judicial pay are intuitively plausible--which is probably why they are so often made. But despite the ubiquity of claims about the effect of judicial pay, empirical examination of the effects of pay variation is still relatively new. (7)

In this Article, we first survey the history of the debate over judicial pay and its purported causal effects. We find that most of the hypothesized causal effects of changes in judicial pay appear to have remained remarkably similar (albeit contradictory) over the past two hundred years. Advocates of more pay continually warn of an imminent decline in the quality of the bench and recount fresh anecdotes of esteemed lawyers who refuse to become judges for their family's sake. Skeptics note that increasing pay may attract candidates with more selfish impulses, and that the qualities that make for a very successful lawyer are different from those that make a good judge. (8) What has changed, however, is the debate over the effect of pay on judicial independence. As the meaning of "judicial independence" has shifted from the independence of the judicial branch from the other branches, to the independence of an individual judge to decide a case free from political pressure or pressure from litigants, efforts to tie increasing judicial pay to preserving judicial independence have required quite different arguments.

We empirically examine the impact of salary on the composition of the appellate bench by estimating the impact of salary on the background of entering judges and the likelihood that currently serving judges will exit the bench. We take advantage of the large variation in real salaries and opportunity costs for state appellate court judges across states from 1977 to 2007 to see how changes in real salary have actually affected the composition of the state court appellate bench and departure from the bench over those thirty years. The size of the dataset, the substantial variation in it, and the time period--one in which private sector legal salaries rose substantially (9)--allow us to test a number of hypotheses about the real-world effect of judicial salaries. For example, we examine whether growing private sector legal salaries have caused an increasing number of judges to leave the state court bench. We also examine the impact of salaries on the composition of the appellate bench.

We conclude that a comparatively low judicial salary slightly increases the chance that an appellate judge will leave the bench but that the effect is small. For judges under the age of sixty-five, the probability of exit is about 2.66% per year. A $10,000 increase in real pay would reduce that probability by 0.00239--a change of about 8.97% from the baseline probability of exit. The effect is not trivial, but our estimates suggest that even large changes in real judicial salaries would not significantly alter the composition of the appellate bench.

Judicial salaries also have a small but significant effect on who becomes an appellate judge. Higher salaries appear to slightly increase the likelihood that appellate judges were formerly either district attorneys or lawyers in private practice, and decrease the chance that the judges were formerly academics, judges in other courts, or public defenders. They have no effect on the overall experience level of the judges or the ranking of the law schools that the judges attended.

Although we do find evidence that decreases in judicial pay change the composition of the bench and increase the likelihood that appellate judges will leave the bench, the effects are relatively small. It is difficult to reconcile our findings with claims that declines in judicial pay, either in actual amount or relative to outside opportunities, could so radically alter the composition of the appellate judiciary that they might prompt a "constitutional crisis." There was a substantial growth in private sector legal salaries during our sample period, yet we observe no wholesale flight from the state appellate bench. Given the extent of variation in our data over fifty states and almost thirty years, we would have expected to observe any dramatic effect of salary on qualifications or departure from the appellate bench if one existed.

In order to determine if our findings were also applicable to the state trial court bench, we examined data on the trial court bench from one state (California). We found that trial court judges appear to be much more sensitive to pay in their decisions to exit than do appellate judges. This finding suggests that the behavior of trial court and appellate judges might be substantially different, but further research on this important point is required.

As with any empirical study, we are limited by our data. Much of the debate on judicial salaries has been about federal judges, and it is possible that changing federal judicial salaries would have different effects from changes in appellate state court salaries. We also offer no conclusions about the effect of an actual pay cut, which may have a very different effect from the failure to raise salaries. (10)

Finally, there may be important judicial-quality issues that are affected by salary but that we are unable to observe. Our survey of the history of the debate reveals an oft-expressed claim that salary will affect judicial quality. Yet there is no commonly accepted or observable measure of judicial quality, so we are unable to offer empirically grounded conclusions about the relationship between judicial salary and quality. (11)

1. BACKGROUND ON THE DEBATE ON JUDICIAL PAY

   In this Part, we summarize the historic debate on the importance of judicial pay. Since the Framers' debate over the Compensation Clause, there has been a constant chorus of concern expressed over proper pay for judges and its relationship to the quality of judicial candidates, fairness to judges, different concepts of judicial independence, and exit from the bench. Here, we summarize this history and identify causal claims that can be tested. While proponents of judicial pay increases and decreases have often combined causal arguments about both the effect of judicial pay on the composition of the judiciary and the independence of judges, we separate these two strands of argument for clarity.

   1. Judicial Pay Affects the Composition of the Bench

      One strand of this debate presumes that judicial salary has a strong effect on the composition of the bench. Over the past two hundred years, here and abroad, three causal mechanisms have often been hypothesized: (1) judicial salary affects the quality of candidates attracted to the bench; (2) judicial salary affects the range of prior careers of candidates attracted to the bench; and (3) judicial salary affects judges' exit from the bench.

      In contrast to a line of reasoning dating from Plato's Republic that prefers the character of rulers who eschew the material pleasures of a regular income, (12) some delegates to the Constitutional Convention argued that limiting judges' salaries would negatively affect the composition of the judiciary. According to Charles Pinckney, for example, the Compensation Clause ought to give Congress the power to raise judicial salaries because "[t]he importance of the Judiciary will require men of the first talents: large salaries will therefore be necessary, larger than the U.S. can allow in the first instance." (13) For Pinckney, the feeble budget of the new republic justified permitting Congress to later increase salaries of judges to attract "men of first talents." (14)

      By the mid-1840s...