The Industrial Organization of the Japanese Bar: Levels and Determinants of Attorney Incomes
University of Tokyo - Faculty of Law
J. Mark Ramseyer
Harvard Law School
Eric Bennett Rasmusen
Indiana University - Kelley School of Business - Department of Business Economics & Public Policy
Harvard Law and Economics Discussion Paper No. 559
Using micro-level data (from tax records) on attorney incomes in 2004, we reconstruct the industrial organization of the Japanese legal services industry. These data suggest a bifurcated bar. The most talented would-be lawyers (those with the highest opportunity costs) pass the bar-exam equivalent on one of their first tries or abandon the effort. If they pass, they then opt for careers in Tokyo that involve complex litigation and business transactions. The work places a premium on their talent, and from it they earn appropriately high incomes. The less talented face lower opportunity costs, and willingly spend many years studying for the exam. If they eventually pass, they tend to forego the many amenities available to professional families in Tokyo and disproportionately opt for careers in the under-lawyered provinces. There, they earn monopoly rents not available in the far more competitive Tokyo market.
Number of Pages in PDF File: 24
Date posted: December 14, 2006
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