The age-wage-productivity puzzle: evidence from the careers of top earners

Rachel Scarfe, Carl Singleton, Adesola Sunmoni, Paul Telemo

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)
15 Downloads (Pure)

Abstract

There is an inverted u-shaped relationship between age and wages in most labor markets, but the effects of age on productivity are often unclear. We use panel data in a market of high earners, professional footballers (soccer players) in North America, to estimate age-productivity and age-wage profiles. We find stark differences; wages increase for several years after productivity has peaked, before dropping sharply at the end of a career. This poses the question: why are middle-aged workers seemingly overpaid? We investigate a range of possible mechanisms that could be responsible, only finding evidence that tentatively supports a talent discovery theory.

Original languageEnglish
Pages (from-to)584-606
Number of pages23
JournalEconomic Inquiry
Volume62
Issue number2
Early online date22 Nov 2023
DOIs
Publication statusPublished - 1 Apr 2024

Keywords

  • labour productivity
  • wages
  • ageing
  • sports labour markets

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