Deferred compensation when monitoring is (nearly) costless: evidence from professional football

Bernd Frick and Hannes Winner

Chapter 5 in Outcome Uncertainty in Sporting Events, 2020, pp 63-74 from Edward Elgar Publishing

Abstract: It is one of the few stylized facts in labour and personnel economics that wages rise with a worker’s seniority. What is not yet clear, however, is whether this is owing to better matches surviving for longer periods of time, to investments in the acquisition of specific human capital or to deferred compensation. Using detailed information on football players’ salaries and their market values from the German Bundesliga as well as the Italian Serie A in the 2014–15 season, we find that salaries peak about two years later than market values. Although we cannot rule out match quality as a potential explanation, our findings are fully consistent with deferred compensation as a motivational device.

Keywords: Economics and Finance (search for similar items in EconPapers)
Date: 2020
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