Do High Wage Footballers Play for High Wage Teams?
9 Pages Posted: 20 Dec 2018
Date Written: December 7, 2018
Intuition and sports knowledge suggest the best professional footballers play for the best teams, i.e. positive assortative matching between employer and employee on productivity. We use wage data for all players and teams in Major League Soccer between 2007 and 2017 and find that estimated player and team fixed wage effects are negatively correlated. This is a puzzle, which could be explained if players match to teams according to some compensating wage differential, for example from a desire to play for successful teams. The estimated wage premiums of teams are highly and negatively correlated with their success in the league (productivity).
Keywords: firm-specific wages, AKM wage equation, matching, superstar pay
JEL Classification: J31, J49, Z22
Suggested Citation: Suggested Citation