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Health shocks and labour market outcomes: evidence from professional football

Vincenzo Carrieri (), Andrew Jones () and Francesco Principe ()

Health, Econometrics and Data Group (HEDG) Working Papers from HEDG, c/o Department of Economics, University of York

Abstract: The negative association between health shocks and labour market outcomes is a well-established finding in the health and labour economics literatures. However, due to lack of data, most of the contributions focus on elderly workers and analyse labour force participation as their main outcome. This paper uses traumatic injuries as a source of exogenous variation in professional football players’ health to provide estimates of the causal impact of a health shock on two main labour market outcomes: annual net wages and the probability of renegotiating the contract between club and player. We have built a unique longitudinal dataset recording information about wages, injuries and other characteristics of the universe of professional football players in the Italian Serie A from 2009 to 2014. We employ panel fixed effects models combined with an IV strategy, which uses the average number of yellow cards received by the team as an instrument. We find that injuries reduce the net wage in the following season by around 12%. This result is mainly driven by precautionary reasons due to the club’s concern about depreciation in the player’s human capital rather than by a direct effect of the shock on the player’s productivity.

Keywords: health shocks; top incomes; football; panel data; instrumental variables (search for similar items in EconPapers)
JEL-codes: C26 D31 I1 J24 J31 (search for similar items in EconPapers)
Date: 2018-01
New Economics Papers: this item is included in nep-hea, nep-lma and nep-spo
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Handle: RePEc:yor:hectdg:18/01