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The Industrial Organization of the Japanese Bar: Levels and Determinants of Attorney Income
Author(s) -
Nakazato Minoru,
Ramseyer J. Mark,
Rasmusen Eric B.
Publication year - 2010
Publication title -
journal of empirical legal studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.529
H-Index - 24
eISSN - 1740-1461
pISSN - 1740-1453
DOI - 10.1111/j.1740-1461.2010.01185.x
Subject(s) - differential (mechanical device) , work (physics) , confidentiality , face (sociological concept) , business , labour economics , economics , demographic economics , law , sociology , political science , engineering , mechanical engineering , social science , aerospace engineering
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.