| Abstract: |
The analysis of English Premier League clubs' reliance on internal versus
external sources for new additions to the first-team is motivated by relevant
labor economics literature. We consider two dimensions for analysis: (i) the
extensive margin that drives the selection of youth players in the first team,
and (ii) the intensive margin that looks at their career lifespan once
selected. Two uniquely created data sets are utilized to establish robust
results in support of the notion that more reputable youth programs provide
greater first-team opportunities through internal hiring. Foreign sourced
players become more prevalent in the league after the Bosman ruling, and their
probability of selection is positively correlated with club stature. Survival
analysis results validate prior results in terms of youth training reputation
of certain clubs, and establishes a presence of heterogeneity at youth club
level that signals differences in player career prospects generated by their
youth training. Further, when the unobserved heterogeneity is modelled using
discrete finite mixtures we get new insights into the role unobservables in
the analysis. In particular, two types of players are identified in the data,
one type that represents 33% is the one that drives the exits of the youth
players. In addition, this model shows that the Bosman ruling positively
impacts the career duration of youth players, as opposed to its negative
effect on first-team selection. |