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Returns to Education in Professional Football

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Author Info

  • Böheim, René

    ()
    (University of Linz)

  • Lackner, Mario

    ()
    (University of Linz)

Abstract

After three years in the National Collegiate Athletic Association (NCAA), collegiate football players face a trade-off between spending more time in the NCAA and pursuing a career in the National Football League (NFL) by declaring for the draft. We analyze the starting salaries and signing bonuses for 1,673 rookies in the NFL, who entered the league between 2001 and 2009 through the NFL draft. We instrument the endogenous decision to enter the professional market with a player's month of birth. A player's true talent is only imperfectly observed and the instrument provides a causal link between time at college and subsequent salaries in the NFL through the relative age effect. Our estimates suggest that a player enjoys a 6% higher starting salary in the NFL, and a 15% higher first-year signing bonus, for each year with the college team. On average, a rookie is estimated to earn $131,000 more in his rookie season, if he enters the NFL one year later. Our analysis of a typical labor market in professional sports shows that the returns to education in sports are sizeable and surprisingly similar to returns to formal education. The results of our analysis provide information for the players who are deciding about declaring for the draft, however, also colleges and the teams in the NFL may find the results of interest.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5665.

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Length: 30 pages
Date of creation: Apr 2011
Date of revision:
Publication status: published in: Economics Letters, 2012, 114 (3), 326-328
Handle: RePEc:iza:izadps:dp5665

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Related research

Keywords: labor markets in sports; returns to education; ability bias; NFL;

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References

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  1. Angrist, Joshua D & Krueger, Alan B, 1991. "Does Compulsory School Attendance Affect Schooling and Earnings?," The Quarterly Journal of Economics, MIT Press, vol. 106(4), pages 979-1014, November.
  2. David Card, 2000. "Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems," NBER Working Papers 7769, National Bureau of Economic Research, Inc.
  3. Justin McCrary & Heather Royer, 2011. "The Effect of Female Education on Fertility and Infant Health: Evidence from School Entry Policies Using Exact Date of Birth," American Economic Review, American Economic Association, vol. 101(1), pages 158-95, February.
  4. Frank Kleibergen & Richard Paap, 2003. "Generalized Reduced Rank Tests using the Singular Value Decomposition," Tinbergen Institute Discussion Papers 03-003/4, Tinbergen Institute.
  5. Bryan L. Boulier & Herman O. Stekler & Jason Coburn & Timothy Rankins, 2009. "Evaluating National Football League Draft Choices: The Passing Game," Working Papers 2009-003, The George Washington University, Department of Economics, Research Program on Forecasting.
  6. Rob Simmons & David Berri, 2008. "Race and the Evaluation of Signal Callers in the National Football League," IASE Conference Papers 0825, International Association of Sports Economists.
  7. Dhuey, Elizabeth & Lipscomb, Stephen, 2008. "What makes a leader? Relative age and high school leadership," Economics of Education Review, Elsevier, vol. 27(2), pages 173-183, April.
  8. Lawrence M. Kahn, 2007. "Markets: Cartel Behavior and Amateurism in College Sports," Journal of Economic Perspectives, American Economic Association, vol. 21(1), pages 209-226, Winter.
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  1. Returns to education in professional football
    by kevin denny in Kevin Denny: Economics more-or-less on 2011-05-15 20:36:46

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