This study examines the effects of occupational licensing on the income of those who obtain them, focusing on the case of lawyers. The analysis considers candidates who took the Italian state examination to access the legal profession at the Court of Appeal of Turin between 1997 and 2000, and compares the earnings of candidates who successfully passed the examination with those who failed but achieved a score only marginally below the minimum required to obtain the license.
Over the 19 years following the first attempt to obtain a license to practice as a lawyer, the average income of those who succeed is higher by €21,000 gross per year compared with non-licensed graduates in Law. This effect is more pronounced in the first ten years and diminishes partially thereafter. The differential could be attributed to the effects of a State examination in restricting competition, to compensation for the higher risks attaching to the profession, or to the lower returns to human capital in alternative occupations to the legal profession for those who do not pass the bar exam.
