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

Tools

Scarfe, Rachel and Singleton, Carl and Sunmoni, Adesola and Telemo, Paul (2024) The age-wage-productivity puzzle : evidence from the careers of top earners. Economic Inquiry, 62 (2). pp. 584-606. ISSN 1465-7295 (https://doi.org/10.1111/ecin.13191)

[thumbnail of Scarfe-etal-EI-2023-The-age-wage-productivity-puzzle-evidence-from-the-careers-of-top-earners]
Preview
 Text. Filename: Scarfe-etal-EI-2023-The-age-wage-productivity-puzzle-evidence-from-the-careers-of-top-earners.pdf
Final Published Version
License: Creative Commons Attribution 4.0 logo
Download (1MB)| Preview

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.

ORCID iDs

Scarfe, Rachel, Singleton, Carl, Sunmoni, Adesola and Telemo, Paul ORCID logoORCID: https://orcid.org/0000-0002-8275-2681;
CORE (COnnecting REpositories)