The Industrial Organization of the Japanese Bar: Levels and Determinants of Attorney Income

30 Pages Posted: 26 Jul 2010

See all articles by Minoru Nakazato

Minoru Nakazato

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

Abstract

Using micro-level tax data on attorney incomes in 2004 (when the law was changed to make it confidential), we analyze the industrial organization of the Japanese bar. These data suggest two sources of high income: an idiosyncratic return to talent in Tokyo and a compensating differential for the lack of amenities in the provinces. The most able would-be lawyers (those with the highest opportunity costs) pass the bar-exam equivalent on one of their first tries or abandon the effort and pursue careers outside of law. If they pass, they opt for careers in Tokyo that involve complex litigation and business transactions. This work places a premium on their talent, and from it they earn appropriately high incomes. The less talented face lower opportunity costs and opt to spend many years studying for the exam. If they do eventually pass, they apparently choose between a relatively low-income career in Tokyo and a provincial career paying a compensating differential.

Suggested Citation

Nakazato, Minoru and Ramseyer, J. Mark and Rasmusen, Eric Bennett, The Industrial Organization of the Japanese Bar: Levels and Determinants of Attorney Income. Journal of Empirical Legal Studies, Vol. 7, Issue 3, pp. 460-489, September 2010, Available at SSRN: https://ssrn.com/abstract=1647242 or http://dx.doi.org/10.1111/j.1740-1461.2010.01185.x

Minoru Nakazato (Contact Author)

University of Tokyo - Faculty of Law ( email )

7-3-1 Hongo Bunkyo-Ku
Tokyo, 113
Japan

J. Mark Ramseyer

Harvard Law School ( email )

1575 Massachusetts
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United States
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Eric Bennett Rasmusen

Indiana University - Kelley School of Business - Department of Business Economics & Public Policy ( email )

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Bloomington, IN Enter your state here 47405
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HOME PAGE: http://rasmusen.org

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