| Summary: | In Japan, the lawyers' market is regulated so strictly that the contrast between the small lawyers' market and the huge economy is surprising. The number of lawyers is about 15,000, while the GDP and population are $4 trillion and 130 million, respectively. The regulation is governed principally by the Supreme Court of Japan and the Ministry of Justice. Regulations are implemented mainly through (1) strict bar examinations and (2) long trial times. The pass rates of the exam are 2-4% each year, and the average trial time (civil cases and District Courts) is 19.2 months. The consequences of the regulation are that (1) consumers pay 13.9-100.0% higher prices than in countries with no regulation, and (2) the expected rate of return on human capital investment in lawyers is very low, around the 0% level. It is not only a great loss for Japanese economy but also very unfortunate for university students that the investment opportunity in this most respected profession is almost blocked. (JEL K23, K40) Reprinted by permission of the publisher.
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