ECIN Replication Package for "The Age-Wage-Productivity Puzzle: Evidence from the Careers of Top Earners"
Principal Investigator(s): View help for Principal Investigator(s) Paul Telemo, University of Strathclyde; Rachel Scarfe, University of Edinburgh; Carl Singleton, University of Reading; Adesola Sunmoni, University of Reading
Version: View help for Version V3
| Name | File Type | Size | Last Modified |
|---|---|---|---|
| Replication package v3 | 10/02/2023 06:15:AM |
Project Citation:
Project Description
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 often unclear. We use panel data on productivity and salaries in a market of high earners, professional footballers (soccer players) in North America, to estimate age-productivity and age-wage profiles. We find stark differences between these profiles; wages continue to increase for several years after productivity has peaked, before dropping sharply at the end of a career. This discrepancy poses the question: why are middle-aged workers seemingly overpaid relative to their contemporaneous productivity? The richness of our dataset allows us to investigate a range of possible mechanisms that could be responsible, including institutional factors, unobserved elements of productivity, and a talent discovery theory, by which teams pay younger players less because their productivity is more uncertain. We find some evidence that tentatively supports this last mechanism.
Scope of Project
J23 Labor Demand
J24 Human Capital; Skills; Occupational Choice; Labor Productivity
J31 Wage Level and Structure; Wage Differentials
J41 Labor Contracts
Z22 Sports Economics: Labor Issues
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