Bankruptcy Rates among NFL Players with Short-Lived Income Spikes
Annamaria Lusardi () and
Colin F. Camerer
American Economic Review, 2015, vol. 105, issue 5, 381-84
We test for consumption smoothing using bankruptcy data on players in the National Football League (NFL), who typically earn several million dollars during an income spike that lasts a few years. The life-cycle hypothesis predicts that players should save substantially while playing and then have little risk of bankruptcy post-NFL. However, players in our sample begin to file for bankruptcy soon after they stop playing and continue filing at a high rate through at least the first 12 years of retirement. Players' total earnings and career lengths have surprisingly little effect on the risk of bankruptcy.
JEL-codes: D14 J44 L83 Z22 (search for similar items in EconPapers)
Note: DOI: 10.1257/aer.p20151038
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