Mark Ramseyer is Mitsubishi Professor of Japanese Legal Studies at Harvard Law School. In this co-sponsored talk, he will discuss a project he has worked on with Minoru Nakazato and Eric B. Rasmusen called, "The Industrial Organization of the Japanese Bar: Levels and Determinants of Attorney Income." This event is co-sponsored with LAPA and East Asian Studies. For more information on professor Ramseyer's research and background, see his Harvard Law School profile.
Using micro-level data on attorney incomes, we reconstruct the industrial organization of the Japanese legal services industry. These data suggest a bifurcated bar, with two sources of unusually 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. If they pass, they tend to 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 willingly spend many years studying for the exam. If they eventually pass, they opt either for relatively low-income careers in Tokyo, or for a practice in the provinces that pays a compensating differential for the lower levels of amenities.