Head Impact, Concussion, and Salary in the NFL: Is There a Compensating Wage-Risk Premium?

Abstract

Sport epidemiological studies have estimated cumulative head impact and concussion rates by American football position group. Meanwhile, the sports economics literature has examined National football league (NFL) player-salary variation, and sports statisticians have studied NFL player productivity. Merging novel data and methodologies, we estimate whether players in position-groups with higher head impact or concussion risk are paid a compensating next-contract salary premium controlling for NFL experience, contract year, and productivity. For 2006 to 2017 NFL seasons, we consider all 1,162 fully observed player contracts and all 290 fully observed, non-rookie player contracts. Specifying two sets of contract-length frequency-weighted, contract-year (of signing) fixed effects linear regressions, we find robust evidence that players receive lagged, next-contract compensation for additional on-field productivity and experience. However, position groups with higher estimated cumulative head impact and, alternatively, higher estimated concussion rate are paid a significant and substantial next-contract dispremium. Results are consistent with an augmented compensating salary-differential theory, in which firm and employee share risk.