Returns to education in professional football

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E S Forschungsinstitut zur Zukunft der ArbeitInstitute for the Study of Labor Returns to Education in Professional Football ABSTRACT Returns to Education in Professional FootballAfter 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.JEL Classification: J31

The relative age effect reversal among the National Hockey League elite

“…We should note that over the considered period, mean and median salaries increased monotonically; however, the lack of control for this increase in real salaries does not affect our analyses because this monotonic increase is already captured while controlling for season-specific unobservable characteristics. We should also note that draft age (similar to age at school entry for studies on the RAE in education) is affected by players’ relative age, as suggested in past research [ 38 , 39 , 40 ]. This inclusion as a control variable improves our interpretation of the RAE estimates, as has been adopted in studies on salary discrimination based on ethnicity where performance measures have been analyzed (for a literature review see [ 41 ]).…”

“…To offset the inherent unfairness of the RAE and the later RAE reversal on performances, understanding these mediating factors could be used to better select talent and encourage resiliency of players. Although previous literature on the RAE in sports and education [ 38 , 39 , 40 ] suggests delaying entry into professional sports/school to reduce performance gaps, the reversal complicates this view as there are potential benefits of being the “underdog.” Finally, from the perspective of the RAE in term of representativeness, our results suggest that adjustments of the drafting rules could reduce the disadvantages suffered by relatively young players.…”

Relative age effects in political selection

“…The relative age effect (RAE) refers to the possible advantage that children get when being relatively old in their cohort, that is, children born early in the calendar year perform better that those born later. The existence of an RAE in various professional sports and educational performance is well documented (see, e.g., Musch and Grondin, 2001, Bedard and Duhey, 2006, Böheim and Lackner, 2012, Fredriksson and Öckert, 2014, and Fumarco and Rossi, 2018. The academic and policy interest here arises for four primary reasons.…”

Age of entry into the labor market and career success: The case of the NFL

“…To test the research hypothesis that age of entry has an effect on NFL career, I adopted the following multiple dependent variables, as there is no consensus measure of NFL career success: 6 weighted career approximate value (CARAV) 7 , length of NFL career in years (CRYR) 8 , years as primary starter (YRPS), and all-pro selection (APS). Dependent variables were modeled 1 Entry age is calculated as the difference between the year of draft and the year of birth to eliminate variation that is caused by the seasonality of hiring (Böheim & Lackner, 2012 Rosen, 2006). 7 For a full description regarding the calculation of CARAV, see Pro-Football-Reference.com.…”

“…Specific to the NFL, playing careers have been investigated vis-à-vis returns to college education (Böheim & Lackner, 2012), the influence of off-field conduct (Stair, Day, Mizak, & Neral, 2008), round of draft pick (Hendricks, Debrock, & Koenker, 2003), and managerial life cycle (Goff & Wisley, 2006). Such emerging research has consistently pointed out that labor supply in the NFL is determined by one's natural talents, attitude toward risk and precocity.…”