DOES EXPERIENCE MATTER? SALARY DISPERSION,COACHING, AND TEAM PERFORMANCE

Using Major League Soccer as a unique dataset, this study examines the direct and indirect role of coaches' experience in determining team performance. Inspired by labor market studies, we applied traditional indicators of team salary structure and, unlike previous studies, empirically test the hypothesis that coach experience affects the way in which team salary distribution influences performance. Our results suggest that coaches with experience as professional soccer players improve team performance directly but worsen the negative effect of a skewed salary distribution. Moreover, experience as a player is more important than coaching experience. (JEL D3, J3, M5)     

Tertiary Performance, Field of Study and Graduate Starting Salaries

This paper analyses data from the University of Western Australia (UWA) Graduate Destination Survey linked to information from the University's Student Records System to explore the determinants of graduates' starting salaries over the years 2002 to 2004. While the details examined also include age, gender, language spoken at home, country of birth, disability status and high school attended, most emphasis is placed on the impact on starting salaries of students' academic performance and their field of study. The analyses show that the main determinant of graduates' starting salaries is the weighted average mark they achieve at university. The salary differentials associated with higher marks in the Australian labour market appear greater than those reported in similar studies of the US and the UK labour markets. Science graduates are shown to have relatively low starting salaries, casting a shadow over recent suggestions that the supply of this group be increased through lower fee regimes.     

NEGOTIATED SETTLEMENT UNDER MLB FINAL‐OFFER SALARY ARBITRATION SYSTEM

This paper provides a detailed analysis of negotiated salaries under Major League Baseball's final‐offer arbitration process using data from the 2007–2010 seasons. There is a wage premium of 25% for hitters and 14% for pitchers filing for arbitration. Interestingly, there is an additional premium for exchanging offers for hitters but not for pitchers. The additional premium in salary for hitters who exchange offers with their clubs amounts to 7%. (JEL J31, J52)     

Racial discrimination and professional basketball salaries in the 1990s

Racial differences in professional basketball player salaries are examined to determine whether the 20% premium paid to whites in the mid-1980s has persisted into the 1990s. OLS and tobit regressions indicate no difference between white and black salaries, controlling for player and team characteristics for the 1994 - 95 season. However, censored quantile regressions show substantial racial differences at certain points in the salary distribution. Whites earn less than blacks at the lower end of the distribution, although the difference is not statistically significant, and varies with minutes played. In contrast, whites receive a significant premium (18%) at the upper end of the salary distribution. These findings are consistent with a form of consumer discrimination in which sports fans prefer to see white star players, all else equal.     

The Impact of Salary Caps in Professional Team Sports

In this paper we analyse the impact of a salary cap on a professional team sports league. We concentrate on the competitive balance, on the level and the distribution of player salaries, on owner profits and total league revenue. A simple model shows that a salary cap can improve the competitive balance among clubs as well as the salary distribution among players. We also investigate how the recent individual salary cap in NBA might affect the competitive balance.     

Raising salary or redistributing it: A panel analysis of Major League Baseball

Using data in Major League Baseball (MLB), this article conducts Panel Granger Causality tests for teams' salary structures and corresponding performance. The results show that a reliable way to enhance performance is to compress salaries rather than to enlarge the payroll.     

SALARIES—A FRAMEWORK FOR THE STUDY OF TRENDS

This paper proposes that salary structures and the development of salaries over time be considered within the framework of the distribution of income over time. In particular, it examines certain salary scales in the U.S. and the progressions of typical individuals' salaries during the period 1948–1969, in comparison with the percentile distributions of household income in the same period, as reflected by the Current Population Survey of the Bureau of the Census.     

SALARY INEQUALITY,TEAM SUCCESS,LEAGUE POLICIES,AND THE SUPERSTAR EFFECT

Using a simple model of a team's salary distribution and data from the recent Collective Bargaining Agreement between players and owners in the National Hockey League, I examine the relationship between a team's salary distribution and its winning percentage. I find that teams with higher relative payrolls and lower salary inequality have higher winning percentages. I also find evidence of a superstar effect, in that teams with a higher maximum player salary have higher winning percentages. The results are sensitive, however, to the particular measure of salary inequality used as well as the endogeneity of the salary distribution. (JEL Z22, L83, J52, C33, C26)     

Base Salaries,Bonus Payments,and Work Absence among Managers in a German Company

This paper provides scarce insider econometric evidence on the structure of management compensation and on the incentive effects of fixed base salaries and bonus payments. Six years of personnel data of 177 managers in a German company are analyzed with special emphasis on the highest achievable bonuses under a Management‐by‐Objectives (MBO) incentive scheme. The main finding of panel negative binomial regressions is that higher achievable bonus payments are correlated with fewer absent working days, which supports the incentive effect of performance pay for managers. The fixed base salary component is, however, not significantly correlated with managers’ work absence.     

What shapes player performance in soccer? Empirical findings from a panel analysis

In this article, we investigate the pay–performance relationship of soccer players using individual data from eight seasons of the German soccer league Bundesliga. We find a nonlinear pay–performance relationship, indicating that salary does indeed affect individual performance. The results further show that player performance is affected not only by absolute income level but also by relative income position. An additional analysis of the performance impact of team effects provides evidence of a direct impact of team-mate attributes on individual player performance.     

Returns to education in professional football

After three years in college, football players face a trade-off between spending more time in college and pursuing a career in the National Football League (NFL). We analyze the salaries for rookies in the NFL and instrument the endogenous decision to enter the professional market with the month of birth (relative age effect). A player enjoys a 6 percent higher starting salary in the NFL for each additional year with the college team. The returns to education in professional sports are sizable and similar to returns to formal education.     

Professors and hamburgers: an international comparison of real academic salaries

In recent years, academic staff unions and associations have argued for higher salaries for academics on the grounds that existing salaries have not kept pace with inflation, are well below commercial salaries and, most glaringly, are much lower than the salaries of their overseas counterparts. However, most international comparisons are made based on exchange rate conversions, which is inappropriate since purchasing power differentials are only reflected in exchange rates in the long term. Furthermore, the volatility of exchange rates make such conversions highly inaccurate. A comparison is provided of real academic salaries by converting the nominal salaries in each country to their purchasing power equivalents, using the Big Mac Index. Our results show that real academic salaries are highest in Hong Kong and Singapore, relative to the developed countries, while Hong Kong tax and social security deductions are lowest. Furthermore, real salary levels, combined with intrinsic considerations such as the quality-of-life, indicate that Canada and New Zealand are unattractive places for visiting/migrating academics, while Australia and the USA are relatively attractive. It is suggested that these findings could be of use to policy-makers and academic unions in salary negotiations, as well as academics making relocation decisions.     

Compensation and Employment Impact of a Full-time MBA Program

The changing Master of Business Administration (MBA) marketplace and considerable direct and indirect costs for an MBA degree mean that school administrators and other stakeholders need a better understanding of what factors may influence the rate of return to their MBA programs. We investigated the potential of using analytical frameworks to identify those variables that may predict employment probabilities and starting salaries of full-time MBA graduates, in the context of a single, private MBA program. Our results suggest that for graduates of this particular program, pre-MBA salary and work experience in accounting, banking, finance, and consulting industries predicted higher post-MBA salary levels, as did having a liberal arts major as an undergraduate. Other human capital measures, such as Graduate Management Admission Test (GMAT) scores or elite undergraduate education, were not associated with higher employment probabilities or salary levels for this program’s students, while having an undergraduate business major was associated with lower employment probability. Although our study has limited inference to determine the value of an MBA education more generally, it has potentially important implications for administrators of MBA programs, who could gain useful insights on applying empirical analysis to their own programs. Although this process can be costly and time consuming without a supportive institutional environment, it could provide useful evidence-based guidelines for practice with substantial payoffs for both the program and the students.     

Do National Basketball Association players need higher salaries to play in high tax states? Evidence from free agents

This article investigates the impact of taxes on the salaries received by National Basketball Association free agents from 2010 to 2014. High state income tax rates affect the after-tax income received by players from their team as well as on any ancillary income. Using data on 576 free agents, we find statistically significant evidence that free agents signing in high tax states receive higher salaries, ceteris paribus. Our results suggest that a one-unit increase in the Average Tax Rate experienced by a free agent in a state leads to free agent salaries being over $60,000 higher.     

SALARY CAP REGULATION IN PROFESSIONAL TEAM SPORTS

This paper analyzes the effects of a percentage‐of‐revenue salary cap in a team sports league with win‐maximizing clubs and flexible talent supply. It shows that a percentage‐of‐revenue cap produces a more balanced league and decreases aggregate salary payments. Taking into account the idiosyncrasies of European football, our paper further highlights the potential conflicts between the league and society. From the perspective of a league governing body, a percentage‐of‐revenue cap always enhances financial stability of win‐maximizing clubs. A social planner, however, will not permit the introduction of such a cap if fans and players unduly suffer. This paper shows under which conditions the social planner accepts (rejects) a salary cap proposed by the league regulator. (JEL D02, D60, L83)     

Major League Baseball 2015, What a Difference a Year Makes

An econometric analysis of the 2015 Major League Baseball season is conducted with respect to regular season victories. Results obtained confirm some, but not all, results reported in prior research. The importance of solid team pitching and offense is underscored. Similar to 2014, team defence did not vary sufficiently to play a statistically significant role in team victory differences. Outcomes for total payrolls and salary disparities differ substantially from prior seasons. History may serve as a guide to what occurs on the field, but it does not always replicate the patterns of bygone years. Parameter heterogeneity is substantial and argues against pooling sample data from season to season. From a strict econometric perspective, the results obtained indicate that panel methods should not be utilized to analyse wins data for Major League Baseball. Ultimately, 2015 represents another departure from the standard baseball norm.     

Reward design and CEO succession in the UK

Previous research has shown that top executives often rise to the peak of their organizations after a long-term employment relationship, and that internal promotion to the top is reflected in enhanced baseline salaries. Using data from a representative sample of UK companies, the links between the fixed and variable elements of the Chief Executive Officer's compensation package are examined and whether the appointment has been promoted internally or recruited from outside of the company. From this analysis, it is concluded that the positive impact on basic pay of elevation to the top job from within the company is not present in total compensation or the structure of pay. It also emerges that although tenure does not significantly impact on the structure of pay, it does alter total reward through its impact on the value of options granted: longer company tenure reduces both the award of share options and the total value of the remuneration package; job tenure, on the other hand, raises the executive's reward primarily through its positive impact on baseline salary. Though share ownership reduces the performance sensitivity of earnings, increases in baseline salary are reflected in greater exposure to the use of share options.     

What Is the Recent Evidence on an Excess Supply of Legal Qualifications in Australia?

This article considers the Australian evidence on whether there has been an excess supply of law graduates. There is evidence of a strong growth in demand for legal services over the past 15 years. It is also shown that the number graduating from Australian universities with a law degree grew by 3.5‐fold between 1989 and 2007. Evidence on employment rates and starting salaries for law graduates does not suggest that the labour market has been unable to absorb this increase in supply. There is, however, some evidence from the 2006 Census of a decline in the median salary of law graduates.     

To each according to their ability? Academic ranking and salary inequality across public colleges and universities

This article compares the salary structure of tenured and tenure-track faculty across schools within the university systems of North Carolina and New York. Specifically, we establish a positive relationship between school prestige and salary inequality, both overall and within specific academic ranks. This result suggests that the value to teaching is less discipline-specific than the value to research output. Marked differences in the aforementioned statistical linkage across academic ranks also confirm prior speculation that junior faculty salaries are more closely tied to academic value than senior faculty salaries.     

Diversity,effort, and cooperation in team-based learning

Student and team performance in 17 sections of an introductory microeco-nomic theory course taught using team-based learning are analyzed to determine what measurable characteristics of teams influence team and individual outcomes. Results suggest that team performance is positively influenced by the grade point average of the top individual on the team as well as the percentage of females on the team. While the level of cooperation within a team does not significantly influence team outcomes, it positively influences individual performance by females while having no statistically significant influence on male performance. Individual success also is positively and significantly influenced by gender diversity and individual effort in team activities, as measured by peer evaluations. These results are robust to a variety of measures of gender diversity.