Pay, Productivity and Aging in Major League Baseball

35 Pages Posted: 31 Jul 2007

See all articles by Jahn Karl Hakes

Jahn Karl Hakes

Albion College; Albion College - Department of Economics and Management

Chad Turner

Nicholls State University

Date Written: July 31, 2007

Abstract

Using panels of player pay and performance from Major League Baseball (MLB), we examine trends in player productivity and salaries as players age. Pooling players of all ability levels leads to a systematic bias in regression coefficients. After addressing this problem by dividing players into talent quintiles, we find that the best players peak about two years later than marginal players, and development and depreciation of ability appear to be more pronounced for players with the highest peak ability levels. Within-career variation, however, is less pronounced than between-player variation, and the talent level of players within a given quintile will typically remain lower than the talent level for rookies in the next higher quintile. Free agents are paid proportionately with their production at all ability levels, whereas young players' salaries are suppressed by similar amounts.

Keywords: Major League Baseball, MLB, career dynamics, player salaries and performance, quintile analysis

Suggested Citation

Hakes, Jahn Karl and Hakes, Jahn Karl and Turner, Chad, Pay, Productivity and Aging in Major League Baseball (July 31, 2007). Available at SSRN: https://ssrn.com/abstract=1004058 or http://dx.doi.org/10.2139/ssrn.1004058

Jahn Karl Hakes

Albion College ( email )

113 Robinson Hall
Albion, MI 49224
United States
517-629-0650 (Phone)

Albion College - Department of Economics and Management ( email )

Albion, MI 49224
United States
517-629-0650 (Phone)
517-629-0428 (Fax)

HOME PAGE: http://people.albion.edu/jhakes

Chad Turner (Contact Author)

Nicholls State University ( email )

Thibodaux, LA 70310
United States
985-448-4194 (Phone)
985-448-4922 (Fax)

HOME PAGE: http://www.nicholls.edu/cturner

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