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Stephan Nüesch
 
''A note on the endogeneity of the pay-performance relationship in professional soccer''
( 2009, Vol. 29 No.3 )
 
 
Torgler and Schmidt (2007) have recently found a positive impact of pay on player performance in German soccer, measured by the number of goals and assists scored within a season. This note shows that their result is spurious as both a player's wage and goal/assist scoring are driven by individual playing abilities. Holding the (unobserved) time-invariant and the varying talent of a player constant, the positive pay-performance link is no longer statistically significant. In professional soccer, wages seem to buy talent rather than motivation.
 
 
Keywords:
JEL: J3 - Wages, Compensation, and Labor Costs: General
J4 - Particular Labor Markets: General
 
Manuscript Received : Jul 14 2009 Manuscript Accepted : Jul 31 2009

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