| By: |
Ian Gregory- Smith (Department of Economics, University of Sheffield) |
| Abstract: |
Studies in labor economics 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 NFL can not 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 |
| Keywords: |
Wages, labor, productivity, injuries, sports |
| JEL: |
J31 |
| Date: |
2019–06 |
| URL: |
http://d.repec.org/n?u=RePEc:shf:wpaper:2019018&r=all |