Minimum Pay Scale and Career Length in the NBA

Johnny Ducking, Peter Andrew Groothuis () and James Richard Hill

No 12-02, Working Papers from Department of Economics, Appalachian State University

Abstract: We use data from the National Basketball Association (NBA) to analyze the impact of minimum salaries on an employee’s career length. The NBA has a salary structure in which the minimum salary a player can receive increases with the player’s years of experience. Salary schedules similar to the NBA’s exist in public education, federal government agencies, the Episcopalian church, and unionized industries. Even though the magnitude of the salaries in the NBA differs from other industries, this study provides insight to the impact of this type of salary structure on career length. Using duration analysis, we find statistically significant evidence that minimum salaries shorten career length. Key Words:

New Economics Papers: this item is included in nep-lab and nep-spo
Date: 2012
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