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The Age-Wage-Productivity Puzzle: A Contribution from Professional Football

Author

Listed:
  • Rachel Scarfe

    (School of Economics, University of Edinburgh)

  • Carl Singleton

    (Department of Economics, University of Reading)

  • Adesola Sunmoni

    (Department of Economics, University of Reading)

  • Paul Telemo

    (School of Economics, University of Edinburgh)

Abstract

There is an inverted u-shaped relationship between age and wages in most labour markets and occupations, but the effects of age on productivity are less clear. We use panel data on the productivity and salaries of all elite professional footballers (soccer players) in North America to estimate age-productivity and age-wage profiles, which control for unobserved player characteristics and for entry and exit from this market, finding stark differences. While the productivity of footballers tends to peak in their early to mid-20s and then falls slowly, wages continue to increase throughout most of their careers, up to age 30, after which they fall rapidly. This discrepancy has been observed in other labour markets and poses the question: why are the youngest and oldest workers seemingly underpaid relative to their productivity? We consider a number of possible mechanisms that could be responsible without finding a clear culprit.

Suggested Citation

  • Rachel Scarfe & Carl Singleton & Adesola Sunmoni & Paul Telemo, 2022. "The Age-Wage-Productivity Puzzle: A Contribution from Professional Football," Economics Discussion Papers em-dp2022-07, Department of Economics, University of Reading.
  • Handle: RePEc:rdg:emxxdp:em-dp2022-07
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    More about this item

    Keywords

    Labour productivity; Wages; Aging; Major League Soccer;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • Z22 - Other Special Topics - - Sports Economics - - - Labor Issues

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