Productivity under Large Pay Increases: Evidence from Professional Baseball

The establishment of the free agency system in the 1970s resulted in large salary increases among professional baseball players. Historical data show that players have tended to perform better at early stages of their careers since free agency was introduced. Under the current salary bargaining system, players only become eligible for salary arbitration and free agency at predetermined points in their careers, resulting in sudden changes in salary growth rates at these points. Using data on official days of major league service, it is found that players with high expected salary growth perform better, consistent with efficiency wage theory.efficiency wages, productivity, baseball

The Effects of Social Security Taxes and Minimum Wages on Employment: Evidence from Turkey

Worker-level panel data are used to analyse the separate employment effects of increases in the social security taxes paid by employers and increases in the minimum wage in Turkey between 2002 and 2005. Variation over time and among low-wage workers in the ratio of total labour costs to the gross wage gives rise to a natural experiment. Regression estimates indicate that a given increase in social security taxes has a larger negative effect on the probability of a worker remaining employed in the next quarter than an equal-sized increase in the minimum wage. This result is incompatible with the textbook model of labour supply and demand and suggests that workers may increase effort in response to an increase in wages. Consistent with this explanation, it is found that groups with the least access to the informal sector experience the smallest disemployment effects of the minimum wage.employment, payroll taxes, minimum wages, Turkey

Team performance and the optimal spread of talent

Alex Bryson and colleagues use US baseball data to investigate whether performance suffers if there is too wide a gap between the skills of a team's stars and the rest.skill dispersion, baseball, firm performance

Heterogeneous Worker Ability and Team-Based Production: Evidence from Major League Baseball, 1920-2009

A detailed longitudinal dataset is assembled containing annual performance and biographical data for every player over the entire history of professional major league baseball. The data are then aggregated to the team level for the period 1920-2009 in order to test whether teams built on a more even distribution of observed talent perform better than those teams with a mixture of highly able and less able players. The dependent variable used in the regressions is the percentage of games a team wins each season. We find that conditioning on average player ability, dispersion of both batting and pitching talent displays an optimal degree of inequality, in that teams with too high or too low a spread in player ability perform worse than teams with a more balanced distribution of offensive and defensive talent. These findings have potentially important applications both inside and outside of the sporting world.firm performance, skill dispersion, baseball

Heterogeneous Worker Ability and Team-Based Production: Evidence from Major League Baseball, 1920-2009

A detailed longitudinal dataset is assembled containing annual performance and biographical data for every player over the entire history of professional major league baseball. The data are then aggregated to the team level for the period 1920-2009 in order to test whether teams built on a more intermediate distribution of observed talent perform better than those teams with either too high or too low a mixture of highly able and less able players. The key dependent variable used in the regressions is the percentage of games a team wins each season. Our finding is that conditioning on average player ability, dispersion in team pitching and hitting talent prior to the start of a season is related in a non-linear way to subsequent team performance. This suggests that there is an optimum heterogeneity of ability at the team level that maximises joint output. This result is robust to the inclusion of team fixed effects as well as year dummies and after controlling for the potential endogeneity of skill dispersion. These findings have potentially important applications both inside and outside of the sporting world.Baseball, Inequality, Team-based Performance

Heterogeneous Worker Ability and Team-Based Production: Evidence from Major League Baseball, 1920-2009

A detailed longitudinal dataset is assembled containing annual performance and biographical data for every player over the entire history of professional major league baseball. The data are then aggregated to the team level for the period 1920-2009 in order to test whether teams built on a more even distribution of observed talent perform better than those teams with a mixture of highly able and less able players. The dependent variable used in the regressions is the percentage of games a team wins each season. We find that conditioning on average player ability, dispersion of both batting and pitching talent displays an optimal degree of inequality, in that teams with too high or too low a spread in player ability perform worse than teams with a more balanced distribution of offensive and defensive talent. These findings have potentially important applications both inside and outside of the sporting world.skill dispersion, baseball, firm performance

Developments in Phased Retirement

Phased retirement may be defined as a transition path whereby an older employee shifts from full-time to part-time work without changing employers. An interesting aspect of phased retirement is that it sometimes occurs after the older employee officially “retires”. Then the recently retired employee is rehired, and the two events are sometimes separated by less than a week. This chapter makes use of a national survey of 950 establishments to address the question of why an employer might make use of such an arrangement. We find that most employers might be willing to informally-arranged reductions in hours both before and after official retirement, and few impose a formal “waiting-time” between official retirement and subsequent rehire. We test several hypotheses about why employers might prefer that phased retirement occur before and/or after official retirement. Our results suggest that pensions, existing employment arrangements, and organizational size play a role. It is likely that such individually-negotiated arrangements will become an ever-more important element of the evolving retirement paradigm

Gender, Source Country Characteristics and Labor Market Assimilation among Immigrants: 1980-2000

We use 1980, 1990 and 2000 Census data to study the impact of source country characteristics on the labor supply assimilation profiles of married adult immigrant women and men. Women migrating from countries where women have high relative labor force participation rates work substantially more than women coming from countries with lower relative female labor supply rates, and this gap is roughly constant with time in the United States. These differences are substantial and hold up even when we control for wage offers and family formation decisions, as well as when we control for the emigration rate from the United States to the source country. Men's labor supply assimilation profiles are unaffected by source country female labor supply, a result that suggests that the female findings reflect notions of gender roles rather than overall work orientation. Findings for another indicator of traditional gender roles, source country fertility rates, are broadly similar, with substantial and persistent negative effects of source country fertility on the labor supply of female immigrants except when we control for presence of children, in which case the negative effects only become evident after ten years in the United States.fertility, labor supply, immigration, assimilation, gender

Who goes on disability when times are tough? The role of work norms among immigrants

We consider how work norms affect the likelihood of people receiving Social Security Disability Insurance (SSDI) in response to worsening economic conditions. By focusing on immigrants in the US, we can examine the influence of work norms in a person’s home country, which we argue are exogenous to labor market prospects in the US. We find that the probability of receiving SSDI benefits is more sensitive to economic downturns among immigrants from countries where people place less importance on work. We also provide evidence that this result is not driven by differential labor market sensitivities to the business cycle or differences in other characteristics that might be correlated with norms