IDEAS home Printed from https://ideas.repec.org/a/pal/easeco/v44y2018i1d10.1057_s41302-016-0070-1.html
   My bibliography  Save this article

Seniority Wages in the National Hockey League

Author

Listed:
  • James A. Brander

    (University of British Columbia)

  • Edward J. Egan

    (Rice University)

Abstract

We show that NHL player salaries exhibit a strong seniority wage structure, as performance-adjusted salaries rise significantly with age for most of the relevant range, peaking about age 32 for forwards. To explain this finding, we estimate a wage equation for NHL forwards, focusing on the league-imposed contractual structure. We show that contract type (determined largely by age) is a significant explanatory variable, as older “unrestricted free agents” earn relatively high performance-adjusted salaries. However, tenure with a given team and age have additional explanatory power even after correcting for contract type, as is consistent with conventional reasons for seniority wages.

Suggested Citation

  • James A. Brander & Edward J. Egan, 2018. "Seniority Wages in the National Hockey League," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 44(1), pages 84-96, January.
    • Handle: RePEc:pal:easeco:v:44:y:2018:i:1:d:10.1057_s41302-016-0070-1
    DOI: 10.1057/s41302-016-0070-1
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/s41302-016-0070-1
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1057/s41302-016-0070-1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Robert C. McLean & Michael R. Veall, 1992. "Performance and Salary Differentials in the National Hockey League," Canadian Public Policy, University of Toronto Press, vol. 18(4), pages 470-475, December.
    2. Canice Prendergast, 1999. "The Provision of Incentives in Firms," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 7-63, March.
    3. Jerry W. Kim & Brayden G King, 2014. "Seeing Stars: Matthew Effects and Status Bias in Major League Baseball Umpiring," Management Science, INFORMS, vol. 60(11), pages 2619-2644, November.
    4. Idson, Todd L & Kahane, Leo H, 2000. "Team Effects on Compensation: An Application to Salary Determination in the National Hockey League," Economic Inquiry, Western Economic Association International, vol. 38(2), pages 345-357, April.
    5. Joseph G. Altonji & Robert A. Shakotko, 1987. "Do Wages Rise with Job Seniority?," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 54(3), pages 437-459.
    6. Simmons, Rob, 2011. "Introduction to special issue of labour economics on sports labour markets," Labour Economics, Elsevier, vol. 18(3), pages 273-274, June.
    7. Lorne Carmichael, 1983. "Firm-Specific Human Capital and Promotion Ladders," Bell Journal of Economics, The RAND Corporation, vol. 14(1), pages 251-258, Spring.
    8. Topel, Robert H, 1991. "Specific Capital, Mobility, and Wages: Wages Rise with Job Seniority," Journal of Political Economy, University of Chicago Press, vol. 99(1), pages 145-176, February.
    9. Brian M. Mills, 2014. "Social Pressure at the Plate: Inequality Aversion, Status, and Mere Exposure," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 35(6), pages 387-403, September.
    10. Lazear, Edward P, 1981. "Agency, Earnings Profiles, Productivity, and Hours Restrictions," American Economic Review, American Economic Association, vol. 71(4), pages 606-620, September.
    11. Addona Vittorio & Yates Philip A, 2010. "A Closer Look at the Relative Age Effect in the National Hockey League," Journal of Quantitative Analysis in Sports, De Gruyter, vol. 6(4), pages 1-19, October.
    12. J. Colin & H. Jones & Serge Nadeau & William Walsh, 1999. "Ethnicity, productivity and salary: player compensation and discrimination in the National Hockey League," Applied Economics, Taylor & Francis Journals, vol. 31(5), pages 593-608.
    13. Steffen Huck & Andrew J. Seltzer & Brian Wallace, 2011. "Deferred Compensation in Multiperiod Labor Contracts: An Experimental Test of Lazear's Model," American Economic Review, American Economic Association, vol. 101(2), pages 819-843, April.
    14. Paul Hek & Daniel Vuuren, 2011. "Are older workers overpaid? A literature review," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 18(4), pages 436-460, August.
    15. Lawrence M. Kahn, 2000. "The Sports Business as a Labor Market Laboratory," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 75-94, Summer.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Aju J. Fenn & Lucas Gerdes & Samuel Rothstein, 2019. "Country of Origin Effects on the Average Annual Values of NHL Player Contracts," IJFS, MDPI, vol. 7(2), pages 1-11, May.
    2. Roman Vavrek, 2021. "An Analysis of Usage of a Multi-Criteria Approach in an Athlete Evaluation: An Evidence of NHL Attackers," Mathematics, MDPI, vol. 9(12), pages 1-22, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:eee:labchp:v:3:y:1999:i:pb:p:2373-2437 is not listed on IDEAS
    2. Alberto Bayo-Moriones & Jose E. Galdon-Sanchez & Maia Güell, 2010. "Is seniority-based pay used as a motivational device? Evidence from plant-level data," Research in Labor Economics, in: Jobs, Training, and Worker Well-being, pages 155-187, Emerald Group Publishing Limited.
    3. Paul Hek & Daniel Vuuren, 2011. "Are older workers overpaid? A literature review," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 18(4), pages 436-460, August.
    4. Zwick, Thomas, 2011. "Seniority wages and establishment characteristics," Labour Economics, Elsevier, vol. 18(6), pages 853-861.
    5. repec:eee:labchp:v:3:y:1999:i:pb:p:2291-2372 is not listed on IDEAS
    6. Alberto Bayo-Moriones, 2001. "Seniority-based pay: is it used as a motivation device?," Working Papers 0103, Departament Empresa, Universitat Autònoma de Barcelona, revised May 2001.
    7. Ghosh, Suman, 2007. "Job mobility and careers in firms," Labour Economics, Elsevier, vol. 14(3), pages 603-621, June.
    8. Daniel Weimar & Katrin Scharfenkamp, 2019. "Effort reduction of employer‐to‐employer changers: Empirical evidence from football," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 40(3), pages 277-291, April.
    9. Brown, Byron W. & Woodbury, Stephen A., 1998. "Seniority, external labor markets, and faculty pay," The Quarterly Review of Economics and Finance, Elsevier, vol. 38(4), pages 771-798.
    10. repec:lan:wpaper:3702 is not listed on IDEAS
    11. I. Sebastian Buhai & Miguel A. Portela & Coen N. Teulings & Aico van Vuuren, 2014. "Returns to Tenure or Seniority?," Econometrica, Econometric Society, vol. 82(2), pages 705-730, March.
    12. B Frick & R Simmons, 2005. "The impact of managerial quality on organizational performance: evidence from German soccer," Working Papers 566927, Lancaster University Management School, Economics Department.
    13. Richard Prisinzano, 2000. "Investigation of the Matching Hypothesis," Journal of Sports Economics, , vol. 1(3), pages 277-298, August.
    14. Dennis Coates, 2017. "Returns to Handedness in Professional Hockey," Sports Economics, Management, and Policy, in: Bernd Frick (ed.), Breaking the Ice, pages 41-56, Springer.
    15. Luigi Guiso & Luigi Pistaferri & Fabiano Schivardi, 2013. "Credit within the Firm," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 80(1), pages 211-247.
    16. Rachel Scarfe & Carl Singleton & Adesola Sunmoni & Paul Telemo, 2024. "The age‐wage‐productivity puzzle: Evidence from the careers of top earners," Economic Inquiry, Western Economic Association International, vol. 62(2), pages 584-606, April.
    17. Dohmen, Thomas J., 2004. "Performance, seniority, and wages: formal salary systems and individual earnings profiles," Labour Economics, Elsevier, vol. 11(6), pages 741-763, December.
    18. Thomas H. Bruggink & Daniel Williams, 2009. "Discrimination against Europeans in the National Hockey League: Are Players Getting Their Fair Pay?," The American Economist, Sage Publications, vol. 54(2), pages 82-90, October.
    19. Cecilia ALBERT & Carlos GARCÍA-SERRANO & Virginia HERNANZ, 2010. "On-the-job training in Europe: Determinants and wage returns," International Labour Review, International Labour Organization, vol. 149(3), pages 315-341, September.
    20. Daniel Parent, 2001. "Incentive Pay in the United States: Its Determinants and Its Effects," CIRANO Working Papers 2001s-04, CIRANO.
    21. repec:lan:wpaper:3594 is not listed on IDEAS
    22. Carolyn Pitchik, 2008. "Self-Promoting Investments," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 164(3), pages 381-406, September.
    23. Steven Salaga & Brian M. Mills & Scott Tainsky, 2020. "Employer-Assigned Workload and Human Capital Deterioration: Evidence From the National Football League," Journal of Sports Economics, , vol. 21(6), pages 628-659, August.
    24. Parent, Daniel, 1996. "Survol des contributions théoriques et empiriques liées au capital humain," L'Actualité Economique, Société Canadienne de Science Economique, vol. 72(3), pages 315-356, septembre.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:easeco:v:44:y:2018:i:1:d:10.1057_s41302-016-0070-1. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave-journals.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.