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Pay, productivity and aging in Major League Baseball

  • Jahn Hakes

    ()

  • Chad Turner

    ()

Using panels of player pay and performance from Major League Baseball (MLB), we examine trends in player productivity and salaries as players age. Pooling players of all ability levels leads to a systematic bias in regression coefficients. After addressing this problem by dividing players into talent quintiles, we find that the best players peak about two years later than marginal players, and development and depreciation of ability appear to be more pronounced for players with the highest peak ability levels. Within-career variation, however, is less pronounced than between-player variation, and the talent level of players within a given quintile will typically remain lower than the talent level for rookies in the next higher quintile. Free agents are paid proportionately with their production at all ability levels, whereas young players’ salaries are suppressed by similar amounts.

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File URL: http://hdl.handle.net/10.1007/s11123-009-0152-8
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Article provided by Springer in its journal Journal of Productivity Analysis.

Volume (Year): 35 (2011)
Issue (Month): 1 (February)
Pages: 61-74

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Handle: RePEc:kap:jproda:v:35:y:2011:i:1:p:61-74
Contact details of provider: Web page: http://www.springerlink.com/link.asp?id=100296

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  1. Daniel R. Marburger, 2004. "Arbitrator Compromise in Final Offer Arbitration: Evidence from Major League Baseball," Economic Inquiry, Western Economic Association International, vol. 42(1), pages 60-68, January.
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  7. Krohn, Gregor A, 1983. "Measuring the Experience-Productivity Relationship: The Case of Major League Baseball," Journal of Business & Economic Statistics, American Statistical Association, vol. 1(4), pages 273-79, October.
  8. Ray C. Fair, 2005. "Estimated Age Effects in Baseball," Cowles Foundation Discussion Papers 1536, Cowles Foundation for Research in Economics, Yale University, revised Mar 2007.
  9. Scully, Gerald W, 1974. "Pay and Performance in Major League Baseball," American Economic Review, American Economic Association, vol. 64(6), pages 915-30, December.
  10. Brad R. Humphreys, 2000. "Equal Pay on the Hardwood: The Earnings Gap between Male and Female NCAA Division I Basketball Coaches," Journal of Sports Economics, , vol. 1(3), pages 299-307, August.
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