From Madrid to Mecca: Wage Premiums in a Specialized Labor Market

Matthew Gnagey and Alvaro La Parra-Perez

Journal of Sports Economics, 2025, vol. 26, issue 4, 454-496

Abstract: We estimate a 400% wage premium for football players transferring from top European leagues to Saudi Arabia in the summer of 2023 compared to those with similar observable characteristics transferring to different clubs within the same leagues. The results are robust to using propensity score matching and other specifications addressing endogeneity. Our analysis does not find evidence for culture driving the premium. Instead, it may be driven by several disamenities, including reputation concerns over Saudi Arabia's human rights record, lower-quality competition, and reduced global media exposure.

Keywords: Compensating wage differentials; European football; Saudi Arabia; specialized labor markets (search for similar items in EconPapers)
JEL-codes: J31 L83 Z20 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:sae:jospec:v:26:y:2025:i:4:p:454-496

DOI: 10.1177/15270025251324934

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