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Returns to Education in Professional Football

Author

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  • 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.

Suggested Citation

  • Böheim, René & Lackner, Mario, 2011. "Returns to Education in Professional Football," IZA Discussion Papers 5665, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp5665
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    References listed on IDEAS

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    1. 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 158-195, February.
    2. Kleibergen, Frank & Paap, Richard, 2006. "Generalized reduced rank tests using the singular value decomposition," Journal of Econometrics, Elsevier, vol. 133(1), pages 97-126, July.
    3. 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.
    4. Boulier, Bryan L. & Stekler, H.O. & Coburn, Jason & Rankins, Timothy, 2010. "Evaluating National Football League draft choices: The passing game," International Journal of Forecasting, Elsevier, vol. 26(3), pages 589-605, July.
    5. 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.
    6. Joshua D. Angrist & Alan B. Keueger, 1991. "Does Compulsory School Attendance Affect Schooling and Earnings?," The Quarterly Journal of Economics, Oxford University Press, vol. 106(4), pages 979-1014.
    7. 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.
    8. Card, David, 2001. "Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems," Econometrica, Econometric Society, vol. 69(5), pages 1127-1160, September.
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Returns to education in professional football
      by kevin denny in Kevin Denny: Economics more-or-less on 2011-05-16 01:36:46

    Citations

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    Cited by:

    1. Luca Fumarco & Giambattista Rossi, 2015. "Relative Age Effect on Labor Market Outcomes for High Skilled Workers – Evidence from Soccer," Management Working Papers 9, Birkbeck Department of Management, revised Mar 2015.
    2. Fumarco, Luca & Gibbs, Benjamin & Jarvis, Jonathan & Rossi, Giambattista, 2016. "The Relative Age Effect Reversal among NHL Elite," MPRA Paper 75691, University Library of Munich, Germany.
    3. Tukiainen, Janne & Takalo, Tuomas & Hulkkonen, Topi, 2017. "Gender Specific Relative Age Effects in Politics and Football," Working Papers 94, VATT Institute for Economic Research.

    More about this item

    Keywords

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

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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