WAGES AND LABOR PRODUCTIVITY: EVIDENCE FROM INJURIES IN THE NATIONAL FOOTBALL LEAGUE

Empirical studies face severe difficulties when identifying the relationship between wages and labor productivity. This paper presents a novel identification strategy and demonstrates that the connection between wages and labor productivity is remarkably robust even when institutional constraints se...

Full description

Saved in:
Bibliographic Details
Published in:Economic inquiry 2021-04, Vol.59 (2), p.829-847
Main Author: Gregory‐Smith, Ian
Format: Article
Language:English
Subjects:
Football
Labor productivity
Professional football
Sports injuries
Wages & salaries
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Empirical studies face severe difficulties when identifying the relationship between wages and labor productivity. This paper presents a novel identification strategy and demonstrates that the connection between wages and labor productivity is remarkably robust even when institutional constraints serve to distort the relationship. Identification is achieved by considering injuries to professional football players as an exogenous shock to labor productivity. This is an ideal empirical setting because injured players in the National Football League cannot be replaced easily because franchises are constrained by the salary cap. Injuries are shown to play a major role in franchise success and a tight connection between wages and marginal productivity emerges. This is in spite of regulatory frictions that serve to hold down wages for some workers. (JEL J24, J31, Z22)
ISSN:0095-2583
1465-7295
DOI:10.1111/ecin.12960