Productivity Shocks and Labour Market Outcomes for Top Earners: Evidence from Italian Serie A

Abstract

How are top earners affected by productivity shocks? We address this question using a unique longitudinal data set on the universe of professional football players in the Italian Serie A, representing 20% of top earners in Italy. We use traumatic injuries and adopt an IV strategy to provide causal estimates of the impact of productivity shocks on several labour market outcomes. We find that a 30‐day injury substantially affects the probability of contract renegotiation and reduces net wages by around 12%. We show that this large penalty is due to employer's precautionary motives rather than to shock‐induced reduction in current player's performance.

Racial Bias in Newspaper Ratings of Professional Football Players

“…We have data relating to 409 outfield players, covering a 9-season period, from 2009-2010 to 2017-2018. We exclude goalkeepers, following the standard approach of this kind of literature (Lucifora and Simmons (2003), Carrieri et al (2020)), since their performance is measured differently compared to the outfield players. This povides a longitudinal dataset of 1,835 player-season observations.…”

“…However, this turnover usually involves heterogeneous types of players, both less talented players traded with teams playing in minor leagues and more talented players traded with top European clubs. This helps to mitigate concerns about selective attrition (Carrieri et al, 2020).…”