A core mechanism of unified growth theory is that accelerating technological progress induces mass education and, through interaction with child quantity‐quality substitution, a decline in fertility. Using unique new data for 21 OECD countries over the period 1750–2000, we test, for the first time, the validity of this core mechanism of unified growth theory. We measure a country's technological progress as patents per capita, R&D intensity, and investment in machinery, equipment, and intellectual property products. While controlling for confounders, such as income growth, mortality, and the gender wage gap, we establish (1) a significant impact of technological progress on education (positive) and fertility (negative); (2) that accelerating technological progress stimulated the fertility transition; and (3) that the baseline results are supported in 2SLS regressions using genetic‐distance weighted foreign patent‐intensity, compulsory schooling years, and minimum working age as instruments.
{"title":"Testing Unified Growth Theory: Technological Progress and the Child Quantity–Quality Trade-off","authors":"J. Madsen, H. Strulik","doi":"10.2139/ssrn.3591147","DOIUrl":"https://doi.org/10.2139/ssrn.3591147","url":null,"abstract":"A core mechanism of unified growth theory is that accelerating technological progress induces mass education and, through interaction with child quantity‐quality substitution, a decline in fertility. Using unique new data for 21 OECD countries over the period 1750–2000, we test, for the first time, the validity of this core mechanism of unified growth theory. We measure a country's technological progress as patents per capita, R&D intensity, and investment in machinery, equipment, and intellectual property products. While controlling for confounders, such as income growth, mortality, and the gender wage gap, we establish (1) a significant impact of technological progress on education (positive) and fertility (negative); (2) that accelerating technological progress stimulated the fertility transition; and (3) that the baseline results are supported in 2SLS regressions using genetic‐distance weighted foreign patent‐intensity, compulsory schooling years, and minimum working age as instruments.","PeriodicalId":210669,"journal":{"name":"Labor: Human Capital eJournal","volume":"24 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-05-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126082451","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Around 1870 the U.S. had no research universities of note, while today it accounts for the largest number in the world. Many accounts attribute this transformation to events surrounding World War II. In contrast, this paper traces its origins to reforms that began in the 1870s. We first explain the origins of the American system's weakness at research. We then present an agency theory framework that highlights ingredients necessary for enhanced research performance. These include specialization and meaningful performance metrics. We then discuss reforms that put these ingredients in place. For example: the introduction of specialized and advanced teaching and the ensuing rise of disciplines/departments; the creation of academic journals; the introduction of selective admissions. Throughout, we emphasize the role played by the U.S. university system's free market orientation.
{"title":"Why Does the U.S. Have the Best Research Universities? Incentives, Resources, and Virtuous Circles","authors":"W. Macleod, M. Urquiola","doi":"10.2139/ssrn.3589536","DOIUrl":"https://doi.org/10.2139/ssrn.3589536","url":null,"abstract":"Around 1870 the U.S. had no research universities of note, while today it accounts for the largest number in the world. Many accounts attribute this transformation to events surrounding World War II. In contrast, this paper traces its origins to reforms that began in the 1870s. We first explain the origins of the American system's weakness at research. We then present an agency theory framework that highlights ingredients necessary for enhanced research performance. These include specialization and meaningful performance metrics. We then discuss reforms that put these ingredients in place. For example: the introduction of specialized and advanced teaching and the ensuing rise of disciplines/departments; the creation of academic journals; the introduction of selective admissions. Throughout, we emphasize the role played by the U.S. university system's free market orientation.","PeriodicalId":210669,"journal":{"name":"Labor: Human Capital eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-04-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126978462","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Korean Abstract: 본 연구에서는 2001년부터 2018년까지 한국의 노동생산성 증가율을 자본 심화, 인적자본 증가, 그리고 총요소생산성 향상으로 분해하였다. 특히 인적자본 증가는 교육수준의 확대에 따른 노동 구성의 변화와 교육비 지출 증가에 따른 교육의 질적 향상으로 구분하여 측정하였다. 분석 결과 2001년부터 2018년까지 한국의 인적자본은 연평균 1.07% 증가하였으며 이 중 0.46%는 노동구성의 변화, 0.61%는 교육의 질적 향상에 기인한 것으로 나타났다. 이런 인적자본의 증가는 동기간 중 노동생산성 증가율의 30%를 설명한다. 2001년 이후 노동생산성 증가율은 하락 추세를 보였는데 이는 자본 심화의 축소와 총요소생산성 증가율 하락에 주로 기인하며 동 기간 중 꾸준한 성장세를 보인 인적자본과는 무관한 것으로 나타났다.
English Abstract: This paper explores the role of human capital in explaining labor productivity growth in Korea between 2001 and 2018. To this aim, a Ben-Porath type human capital production function is estimated where human capital accumulates through both time spent in school and spending on educational goods. The estimation result shows that human capital in Korea increased by 1.07% per year over the sample period, 0.61%p of which is attributable to the increased educational expenditures. This human capital growth explains about 30% of the labor productivity growth. The result also implies that the downward trend in Korea’s labor productivity growth since 2001 is mainly due to a decline in both capital deepening and TFP growth rather than a stagnation in human capital growth.
Korean Abstract:本研究将2001年至2018年韩国劳动生产率增加率分解为资本深化、人力资本增加和总要素生产率提高。特别是人力资本的增加分为随着教育水平的扩大劳动构成的变化和教育费支出的增加教育质量的提高来测定。分析结果显示，从2001年到2018年，韩国的人力资本年均增加1.07%，其中0.46%源于劳动结构的变化，0.61%源于教育质量的提高。人力资本的这种增加说明了同期劳动生产率增加率的30%。据调查，自2001年以后，劳动生产性增加率显示出了下滑趋势，这主要源于资本深化的缩小和总要素生产性增加率的下滑，与同期内显示出持续增长趋势的人力资本无关。English Abstract: This paper explores the role of human capital in explaining labor productivity growth in Korea between 2001 and 2018。To this aim, a Ben-Porath type human capital production function is estimated where human capital accumulates through both time spent in school and spending on educational goods。The estimation result shows that human capital in Korea increased by 1.07% per year over The sample period, 0.61%p of which is attributable to The increased educational expenditures。This human capital growth explains about 30% of the labor productivity growth。The result also implies that The downward trend in Korea ' s labor productivity growth since 2001 is mainly due to a decline in both capital deepening and TFP growth rather than a stagnation in humancapital growth。
{"title":"2001년 이후 한국의 노동생산성 성장과 인적자본: 교육의 질적 개선 효과를 중심으로 The Role of Human Capital in Explaining Labor Productivity Growth in Korea Since 2001","authors":"Hye Mi You","doi":"10.2139/ssrn.3586156","DOIUrl":"https://doi.org/10.2139/ssrn.3586156","url":null,"abstract":"<b>Korean Abstract:</b> 본 연구에서는 2001년부터 2018년까지 한국의 노동생산성 증가율을 자본 심화, 인적자본 증가, 그리고 총요소생산성 향상으로 분해하였다. 특히 인적자본 증가는 교육수준의 확대에 따른 노동 구성의 변화와 교육비 지출 증가에 따른 교육의 질적 향상으로 구분하여 측정하였다. 분석 결과 2001년부터 2018년까지 한국의 인적자본은 연평균 1.07% 증가하였으며 이 중 0.46%는 노동구성의 변화, 0.61%는 교육의 질적 향상에 기인한 것으로 나타났다. 이런 인적자본의 증가는 동기간 중 노동생산성 증가율의 30%를 설명한다. 2001년 이후 노동생산성 증가율은 하락 추세를 보였는데 이는 자본 심화의 축소와 총요소생산성 증가율 하락에 주로 기인하며 동 기간 중 꾸준한 성장세를 보인 인적자본과는 무관한 것으로 나타났다.<br><br><br><b>English Abstract:</b> This paper explores the role of human capital in explaining labor productivity growth in Korea between 2001 and 2018. To this aim, a Ben-Porath type human capital production function is estimated where human capital accumulates through both time spent in school and spending on educational goods. The estimation result shows that human capital in Korea increased by 1.07% per year over the sample period, 0.61%p of which is attributable to the increased educational expenditures. This human capital growth explains about 30% of the labor productivity growth. The result also implies that the downward trend in Korea’s labor productivity growth since 2001 is mainly due to a decline in both capital deepening and TFP growth rather than a stagnation in human capital growth.","PeriodicalId":210669,"journal":{"name":"Labor: Human Capital eJournal","volume":"23 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-04-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115288196","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Slightly missing a school starting age cutoff date, and more generally a student's relative age in their cohort, has been shown in recent research to have important effects. A student's relative age appears to influence their academic success in elementary and middle school, and there is mixed evidence some of these disparities continue into adult labor markets. The time in between, especially one's collegiate years, have been less studied. How far into life relative age effects consistently persist therefore remains an open question. We use a nationwide sample of students from 619 institutions to examine if relative age is related to success in high school and college. Results show the oldest students within a cohort earn slightly better average grades in high school and college and are significantly less likely to fail college courses. We also find mixed evidence that relative age is related to college entrance exam performance.
{"title":"Older and Wiser? Relative Age and Success in High School and College","authors":"P. Routon, Jay K. Walker","doi":"10.2139/ssrn.3586772","DOIUrl":"https://doi.org/10.2139/ssrn.3586772","url":null,"abstract":"Slightly missing a school starting age cutoff date, and more generally a student's relative age in their cohort, has been shown in recent research to have important effects. A student's relative age appears to influence their academic success in elementary and middle school, and there is mixed evidence some of these disparities continue into adult labor markets. The time in between, especially one's collegiate years, have been less studied. How far into life relative age effects consistently persist therefore remains an open question. We use a nationwide sample of students from 619 institutions to examine if relative age is related to success in high school and college. Results show the oldest students within a cohort earn slightly better average grades in high school and college and are significantly less likely to fail college courses. We also find mixed evidence that relative age is related to college entrance exam performance.","PeriodicalId":210669,"journal":{"name":"Labor: Human Capital eJournal","volume":"7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-04-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122361353","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Nina Boberg-Fazlić, P. Jensen, M. Lampe, P. Sharp, C. Skovsgaard
We explore the role of elites for development and in particular for the spread of cooperative creameries in Denmark in the 1880s, which was a major factor behind that country’s rapid economic catch-up. We demonstrate empirically that the location of early proto-modern dairies, so-called hollænderier, introduced onto traditional landed estates by landowning elites from the Duchies of Schleswig and Holstein in the eighteenth century, can explain the location of cooperative creameries in 1890, more than a century later. We interpret this as evidence that areas close to estates which adopted the Holstein System witnessed a gradual spread of modern ideas from the estates to the peasantry. Moreover, we identify a causal relationship by utilizing the nature of the spread of the Holstein System around Denmark, and the distance to the first estate to introduce it, Sofiendal. Finally, we demonstrate that areas with cooperatives also enjoyed higher levels of income.
{"title":"'Getting to Denmark': The Role of Elites for Development","authors":"Nina Boberg-Fazlić, P. Jensen, M. Lampe, P. Sharp, C. Skovsgaard","doi":"10.2139/ssrn.3578366","DOIUrl":"https://doi.org/10.2139/ssrn.3578366","url":null,"abstract":"We explore the role of elites for development and in particular for the spread of cooperative creameries in Denmark in the 1880s, which was a major factor behind that country’s rapid economic catch-up. We demonstrate empirically that the location of early proto-modern dairies, so-called hollænderier, introduced onto traditional landed estates by landowning elites from the Duchies of Schleswig and Holstein in the eighteenth century, can explain the location of cooperative creameries in 1890, more than a century later. We interpret this as evidence that areas close to estates which adopted the Holstein System witnessed a gradual spread of modern ideas from the estates to the peasantry. Moreover, we identify a causal relationship by utilizing the nature of the spread of the Holstein System around Denmark, and the distance to the first estate to introduce it, Sofiendal. Finally, we demonstrate that areas with cooperatives also enjoyed higher levels of income.","PeriodicalId":210669,"journal":{"name":"Labor: Human Capital eJournal","volume":"74 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-04-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121883714","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Using the secondary bastions of Entrepreneurship in India this papers aims to record the changes in GDP per Capita and the employment and the Employment level in India caused by Entrepreneurship. Using empirical data for a particular period, this paper aims to establish the existence of a positive relationship relationship between entrepreneurship and economic growth measured as GDP per Capita and Employment. A simple multivariate regression has been used for the analysis. Affirming the hypothesis, it was found that entrepreneurship affected the GDP per Capita with a positive relationship. However, there is significant evidence to show positive relationship between Entrepreneurship and Employment.
{"title":"Role of Entrepreneurship in Indian Economy","authors":"Mani Kumari","doi":"10.2139/ssrn.3784046","DOIUrl":"https://doi.org/10.2139/ssrn.3784046","url":null,"abstract":"Using the secondary bastions of Entrepreneurship in India this papers aims to record the changes in GDP per Capita and the employment and the Employment level in India caused by Entrepreneurship. Using empirical data for a particular period, this paper aims to establish the existence of a positive relationship relationship between entrepreneurship and economic growth measured as GDP per Capita and Employment. A simple multivariate regression has been used for the analysis. Affirming the hypothesis, it was found that entrepreneurship affected the GDP per Capita with a positive relationship. However, there is significant evidence to show positive relationship between Entrepreneurship and Employment.","PeriodicalId":210669,"journal":{"name":"Labor: Human Capital eJournal","volume":"103 33 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-04-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116277749","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Oscar Calvo�?González, G. Caruso, R. A. Castaneda Aguilar, Eduardo Alonso Malasquez Carbonel
To comprehend how development really happens, it is necessary to understand the evolution of its drivers and their relationship with individuals' income. This paper analyzes the expansion of access to education and basic services in Latin America and its association with the evolution of incomes in the region. The paper focuses on the importance of access to opportunities as one of the drivers of development and highlights the role of policy making. The findings suggest that access to education and basic public services early in life are positively correlated with incomes in adulthood. The analysis also suggests that countries follow a dissimilar path to increase access to education and basic services. The paper undertakes a comprehensive analysis of historic census records to add granularity to the assessment of the development of countries, matched with detailed individual-level information from household surveys of several countries in the region. The paper widens an ongoing area of research on the long-run relationship between access to opportunities during childhood and incomes in adulthood.
{"title":"What Do 50 Years of Census Records and Household Survey Data Tell Us about Human Opportunities and Welfare in Latin America?","authors":"Oscar Calvo�?González, G. Caruso, R. A. Castaneda Aguilar, Eduardo Alonso Malasquez Carbonel","doi":"10.1596/1813-9450-9205","DOIUrl":"https://doi.org/10.1596/1813-9450-9205","url":null,"abstract":"To comprehend how development really happens, it is necessary to understand the evolution of its drivers and their relationship with individuals' income. This paper analyzes the expansion of access to education and basic services in Latin America and its association with the evolution of incomes in the region. The paper focuses on the importance of access to opportunities as one of the drivers of development and highlights the role of policy making. The findings suggest that access to education and basic public services early in life are positively correlated with incomes in adulthood. The analysis also suggests that countries follow a dissimilar path to increase access to education and basic services. The paper undertakes a comprehensive analysis of historic census records to add granularity to the assessment of the development of countries, matched with detailed individual-level information from household surveys of several countries in the region. The paper widens an ongoing area of research on the long-run relationship between access to opportunities during childhood and incomes in adulthood.","PeriodicalId":210669,"journal":{"name":"Labor: Human Capital eJournal","volume":"23 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-04-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124841564","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Education is globally considered as an important investment in building human capital. Human capital is the means of all technical innovation and economic growth. Providing education to all is considered as primary duty of the government. But the government has diverted its focus from higher education to primary education and welcomed private sector to enter the higher education sector, which is termed as privatization of higher education. There is a wave of privatization of education in our country. The need of higher education system has been increasing rapidly in India. The government of India realized that public budgets cannot adequately fund higher education need of vast population. So, the government has taken measures such as, hike in student fees, student loans and privatization; in justification of availability and mobilization of resources to expand higher education. These measures have made higher education a lucrative business for industrialists. A large number of private institutions are encouraged to enter in education sector. On the one hand privatization of higher education made education assessable to the masses; on the other hand it brings fee hike, poor quality, exploitation of professionals etc. There are views for and against privatization of higher education in India. Though some have been criticizing the concept even before it has come to be defined and taken off the ground, others consider it very useful and need of the hour. As students are the most important stakeholders of education system. The present study is an attempt to analyse the attitude of college students towards privatization of higher education.
{"title":"Privatization of Higher Education: A Study on Students’ Perspective","authors":"Prof. Mahrukh Mirza, Z. Nisa","doi":"10.2139/ssrn.3569511","DOIUrl":"https://doi.org/10.2139/ssrn.3569511","url":null,"abstract":"Education is globally considered as an important investment in building human capital. Human capital is the means of all technical innovation and economic growth. Providing education to all is considered as primary duty of the government. But the government has diverted its focus from higher education to primary education and welcomed private sector to enter the higher education sector, which is termed as privatization of higher education. There is a wave of privatization of education in our country. The need of higher education system has been increasing rapidly in India. The government of India realized that public budgets cannot adequately fund higher education need of vast population. So, the government has taken measures such as, hike in student fees, student loans and privatization; in justification of availability and mobilization of resources to expand higher education. These measures have made higher education a lucrative business for industrialists. A large number of private institutions are encouraged to enter in education sector. On the one hand privatization of higher education made education assessable to the masses; on the other hand it brings fee hike, poor quality, exploitation of professionals etc. There are views for and against privatization of higher education in India. Though some have been criticizing the concept even before it has come to be defined and taken off the ground, others consider it very useful and need of the hour. As students are the most important stakeholders of education system. The present study is an attempt to analyse the attitude of college students towards privatization of higher education.","PeriodicalId":210669,"journal":{"name":"Labor: Human Capital eJournal","volume":"19 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-04-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122035858","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The paper presents and analyses a general equilibrium occupational choice model with labour market frictions and heterogeneous agents. The main theoretical contribution of this model is that, unlike previous directed search models, it allows agents to self-select not only into different sectors but also into an entrepreneurial/managerial career or a regular employment career. Making use of a stochastic output and of positive assortative matching, the model gives rise to possible equilibria where the highest ability agents become either workers or entrepreneurs/managers in the technologically intensive sector. Considering the equilibrium where workers are drawn from the middle of the ability distribution, I find that, consistent with stylized facts, an increased regional technological development increases both top income inequality and the entrepreneurship rate in the technologically intensive sector.
{"title":"Regional Technological Capacity and Entrepreneurship: Heterogeneous Agents and Occupational Choice in a Directed Search Market","authors":"Despoina Balouktsi","doi":"10.2139/ssrn.3567694","DOIUrl":"https://doi.org/10.2139/ssrn.3567694","url":null,"abstract":"The paper presents and analyses a general equilibrium occupational choice model with labour market frictions and heterogeneous agents. The main theoretical contribution of this model is that, unlike previous directed search models, it allows agents to self-select not only into different sectors but also into an entrepreneurial/managerial career or a regular employment career. Making use of a stochastic output and of positive assortative matching, the model gives rise to possible equilibria where the highest ability agents become either workers or entrepreneurs/managers in the technologically intensive sector. Considering the equilibrium where workers are drawn from the middle of the ability distribution, I find that, consistent with stylized facts, an increased regional technological development increases both top income inequality and the entrepreneurship rate in the technologically intensive sector.","PeriodicalId":210669,"journal":{"name":"Labor: Human Capital eJournal","volume":"16 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-04-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124855349","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We study the determinants of superstar wage effects, asking whether productivity or popularity-based explanations are more appropriate. We use longitudinal wage and performance data for workers (players) and firms (teams) from a particular market for sports talent: Major League Soccer (MLS) in the United States. We find evidence that the top earners, whose annual salaries are mostly not accounted for by their past MLS performances, when compared alongside other footballers, are paid more because they attract significantly higher stadium attendances and thus revenues. There is no evidence that higher residual salary spending by the teams affects their relative performance in football terms, or that the amounts the teams spend on actual talent affect attendances. Taken together, these results suggest that a popularity-based explanation of superstar wage effects is appropriate among the top earners in this labour market.
{"title":"Extreme Wages, Performance and Superstars in a Market for Footballers","authors":"R. Scarfe, Carl Singleton, Paul Telemo","doi":"10.2139/ssrn.3577114","DOIUrl":"https://doi.org/10.2139/ssrn.3577114","url":null,"abstract":"We study the determinants of superstar wage effects, asking whether productivity or popularity-based explanations are more appropriate. We use longitudinal wage and performance data for workers (players) and firms (teams) from a particular market for sports talent: Major League Soccer (MLS) in the United States. We find evidence that the top earners, whose annual salaries are mostly not accounted for by their past MLS performances, when compared alongside other footballers, are paid more because they attract significantly higher stadium attendances and thus revenues. There is no evidence that higher residual salary spending by the teams affects their relative performance in football terms, or that the amounts the teams spend on actual talent affect attendances. Taken together, these results suggest that a popularity-based explanation of superstar wage effects is appropriate among the top earners in this labour market.","PeriodicalId":210669,"journal":{"name":"Labor: Human Capital eJournal","volume":"25 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-03-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114675335","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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