PRODUCTIVITY AND WAGES IN THE JAPANESE FOOTBALL LEAGUE

Abstract

Using matched performance data and annual salary data of Japanese professional footballers, we examine the discrepancy between productivity and wages. We find that high productivity, as measured by effort and skill, contributes to raising the probability of winning matches in the Japanese professional football league, but that players’ effort and skills are not well reflected in their wages, with wages sometimes even having a negative influence on performance. Furthermore, we find that players’ attributes, such as experience, are larger drivers of wage levels than effort or skill level. The evidence suggests a seniority-based pay scale in a professional football league in the sense that reputation and “names” have market value. This discrepancy between productivity and wages suggests that there may exist inefficiency in payroll even in the professional labor market.