Abstract: Under certain circumstance, a relaxation in occupational licensing standards can increase the quality
of those who enter the industry. The effect turns on the opportunity costs of preparing for the licensing
examination: making the test easier can increase the quality of those passing if it lowers the opportunity
costs enough to increase the number of those willing to go to the trouble of taking the test. We explore
the theoretical circumstances under which this can occur and the actual effect of the relaxation of the
diffculty of the bar exam in Japan from 1992 to 2011.