How Much Does the Bar Exam Decrease the Size of the American Legal Profession?

Abstract

I investigate how requiring lawyers to pass the bar exam affects the size of the American legal profession. Using data from 1984 to 2019, I find that the bar exam requirement decreases the size of the profession by 14 percent. The minimum passing score explains three-fourths of the impact, with the remainder largely explained by policies that delay the entry of law school graduates into the profession. The results suggest that eliminating the bar exam would meaningfully increase the size of the profession and that differences in state-specific policies play a substantial role in influencing the magnitude of the effect.

Keywords: Occupational Licensing, Labor Supply, Legal Profession

JEL Classification: J44, J21, L43, K23