Labour markets in professional sports

Current facets (Pre-Master)

Abstract

The PhD-candidate will use sports data to study labour markets and labour market behaviour of firms and workers.

Professional sports offer a fruitful area for labour market research. Using sports data, one can for example examine the effects of incentives on behaviour, i.e. how incentive schemes stimulate the performance of individual players and the behaviour of teams. One can also study whether hiring of better quality management affects team performance. Thus, sports data can help economics by providing a unique setting to empirically test theoretical predictions. The PhD-project aims to tackle central questions in labour economics by using the sports labour market as a data source. Since data on worker characteristics, performance and remuneration are available in unique detail for this labour market, empirical analysis is possible beyond what can be done in most other industries.

Keywords

Professional sports, labour markets, empirical analysis, sports data, high-quality research

Topic

The focus of the proposed PhD research is to study questions in labour economics through sports data. The research will follow-up on research done by both supervisors Jan van Ours and Thomas Peeters.

In recent years, Jan van Ours has published a string of papers studying sports data. He has, for example, investigated the link between manager dismissals and team performance (Van Ours & Van Tuijl, 2016), the matching of runners and teams based on past performance (Filipin & Van Ours, 2015) and the relationship between age and productivity in a sample of non-professional runners. Thomas Peeters has been involved in studying restrictive employment practices in European football (Peeters & Szymanski, 2014), the hiring behaviour of English football clubs (Peeters, Szymanski & Terviö, 2017) and the relevance of management for firms in professional baseball (Peeters, Salaga & Juravich, 2015).

The central research questions in this PhD project revolve around the sports labour market. A first potential topic is the matching of workers to firms in the international market of professional football coaches. What determines the duration, quality, formation of a worker-firm match? Is there sorting of better workers to better firms visible in the data? Is manager quality diminished by cross-border mobility? A second potential topic deals with the impartiality of referees. Are there biases in referee decision making? Can this lead to inappropriate advantages for certain teams? How can incentive schemes be implemented to counteract biases? Furthermore, the student will be stimulated to explore additional research ideas in the area of personnel and labour economics, which may arise during the PhD trajectory. Therefore the questions listed here are best viewed as exemplary.

Approach

The research will be based on data from various professional sports. The research method therefore depends on the nature of the data. Most likely the data will be related to individuals and individual teams. For this, micro-econometric methods of analysis will be used such as panel data econometrics. To the extent that durations of for example contracts are analysed hazard rate analysis will be used. Given the richness of the data, novel approaches may be developed to deal with empirical challenges in the literature.

Literature references

  • Apesteguia, J. & I. Palacios-Huerta (2010). Psychological pressure in competitive environments: evidence from a randomized natural experiment, American Economic Review, 100, 2548-2564.
  • Carlson, K., J. Kim, A. Lusardi & C.F. Camerer (2015). Bankruptcy Rates among NFL Players with Short-Lived Income Spikes. American Economic Review, 105(5): 381-84.
  • Filippin, A. & J.C. van Ours (2015). Positive assortative matching: Evidence from sports data, Industrial Relations, 54, 401-421.
  • Genakos, C. & M. Pagliero (2012). Interim rank, risk taking, and performance in dynamic tournaments, Journal of Political Economy, 120, 782-813.
  • Kleven, H.J., Landais, C. & Saez, E. (2013). Taxation and International Migration of Superstars: Evidence from the European Football Market, American Economic Review, Vol. 103, No. 5, August 2013, 1892-1924.
  • Kuper, S. and S. Szymanski (2014). Soccernomics: Why England Loses, Why Spain, Germany, and Brazil Win, and Why the US, Japan, Australia and Even Iraq Are Destined to Become the Kings of the World's Most Popular Sport, Nation Books,
  • Palacios-Huerta, I. (2014). Beautiful game theory; how soccer can help economics, Princeton: Princeton University Press.
  • Parsons, C.A., J. Sulaeman, M.C. Yates & D.S. Hamermesh (2011). Strike three: discrimination, incentives, and evaluation, American Economic Review, 101, 1410-1435.
  • Peeters, T.L.P.R. (2018). Testing the Wisdom of Crowds in the Field: Transfermarkt Valuations and International Football Results, International Journal of Forecasting, 34, 17-29.
  • Peeters, T.L.P.R., S. Salaga & M. Juravich (2015). Matching and Winning? The Impact of Upper and Middle Managers on Team Performance, Tinbergen Discussion Paper, 15/115.
  • Peeters, T.L.P.R. & S. Szymanski (2014). Financial Fair Play in European Football, Economic Policy, 29, 343-390.
  • Peeters, T.L.P.R., S. Szymanski & M. Terviö (2017). The inefficient advantage of experience in the market for football managers, Working paper, 49p.
  • Price, J. & J. Wolfers (2010). Racial Discrimination among NBA Referees. Quarterly Journal of Economics,125 (4): 1859-1887.
  • Van Ours, J.C. & M.A. van Tuijl (2016). In-season head-coach dismissals and the performance of professional football teams, Economic Inquiry, 54, 591-604.

Data sources

Various internet databases, for example:

Hand collected databases from previous projects:

  • Financial accounts European football clubs (see Peeters & Szymanski, 2014)
  • Player valuation panel Transfermarkt (see Peeters, 2018)
  • Financial archive US sports leagues (available through Rodney Fort, University of Michigan)

Cooperation

Cooperation will be set up with Professor Stefan Szymanski (University of Michigan, Ann Arbor, USA). The PhD student will be part of the newly established Erasmus School of Economics CASE (Centre for Applied Sports Economics). The ambition of CASE is to stimulate high-quality research in sports economics including the relationship between sports, health and happiness. CASE is intended to be a virtual centre with a focus on economic research, but with an open mind set, such that sports researchers from related disciplines, both inside and outside the Erasmus School of Economics, are welcome to participate.

Expected output

First and foremost, the PhD project aims at high-quality research. The project will result in a PhD thesis based on three to four empirical research papers. Some of these will be written jointly with one or both supervisors. These research papers will be published in discussion paper series (at CASE and Tinbergen Institute) and submitted for publication in top ranked international journals in the areas of behavioural, labour and managerial economics. The topic of the paper will determine in which area the paper is to be submitted, but preference will be given to top general interest economics journals. The results of the research will regularly be presented during seminars at ESE. Furthermore, the PhD student will present papers at various national and international workshops and conferences – like the European Economic Association, the European Association of Labour Economists and the European Society for Population Economics.

Scientific relevance

Sports can help economics by providing a unique setting to empirically test theoretical predictions. Economists may observe the behaviour of people in a variety of interesting settings, e.g. decision making under pressure, gender differences in risky behaviour etc. The use of this sports ‘laboratory’ is not restricted to helping behavioural economists. Labour economists have taken an interest in the unique observability of personal characteristics, labour market outcomes and interpersonal relationships. Organisational and personnel economists may look at the impact of management and coaching practices. Political economists have studied the extent of bribing and cheating in sports to learn how responsive people are to regulation. As a result, there is a significant number of recent publications in the top 5 economic journals, which exploit the sports setting. This list will continue to grow as research in this area expands.

Societal relevance

There are numerous sports, which are widely covered by the press and played by millions of enthusiastic amateurs. Millions of active sportsmen and sportswomen set out for their weekly stroll or game of tennis, while at the same time millions of passive sports fans enjoy watching professionals performing the very same sports. Sports are important from a societal point of view, not just for the pleasure derived from participating, but also for their cultural significance. In many countries the performance of national teams and athletes, is a cornerstone of national prestige and identity. It would be strange if economists, who are social scientists after all, would neglect to study such an extremely widespread and characteristic feature of modern society.

Economic analysis is crucial to ensure the proper functioning of sports. First, professional sports are quickly becoming an important economic activity in their own right. Given this industry’s particularities in terms of competition policy, e.g. salary caps, revenue sharing…, economists should contribute to the design of appropriate regulation and policy, using theoretical and empirical methods developed in industrial organization. Second, there are important economic consequences of the societal effects of sports and sporting behaviour. For example, economists have studied the costs of health, absenteeism from work and criminality in relation to sports, the happiness effects of sports betting but also the costs and benefits of mega sporting events and sports infrastructure, both in monetary terms and in terms of personal well-being. These aspects are easiest to analyse using the toolkit of applied economics and econometrics.

PhD candidate profile

The PhD student to be appointed should be familiar with quantitative methods to analyse labour market behaviour of individuals and with relevant labour market theories. The student should be eager to learn new theories and explore new empirical methods. In depth knowledge of any particular sport is not required.

Supervisor(s)

Prof. Dr. Jan van Ours
T: +31 (0)10 4081373
E: vanours@ese.eur.nl

Dr. Thomas Peeters
T: +31 (0)10 4081388
E: peeters@ese.eur.nl

Graduate school

Depending on the candidate's interest the project can be affiliated with either ERIM (for a Research in Management approach) or the Tinbergen Institute (for an Economics and Econometrics approach).

Applicants for this project need to pass ERIM's or the Tinbergen Institute's admission requirements (depending on the approach) before they can be considered for a PhD position at ESE.

If you are unsure of the graduate school with which you want to be affiliated please contact the projects supervisor.

Deadline

Application deadline: 15 January 2018

Interested?

Depending on the candidate's interest the project can be affiliated with either ERIM (for a Research in Management approach) of the Tinbergen Institute (for an Economics and Econometrics approach).

ERIM

ERIM project page

Tinbergen Institute

Apply for this project using the Tinbergen Institute online application form

Tinbergen project code:

TI PhD 2018 JvO TP