Labour Markets in Professional Sports

Farnell, Alex and Simmons, Robert and O'Sullivan, Vincent (2022) Labour Markets in Professional Sports. PhD thesis, Lancaster University.

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Abstract

Measuring performance and quantifying outcomes can prove a difficult task in empirical economics research. Because of this, economists have often turned to the setting of professional sports to overcome these data limitations. Sports and sports data presents a unique opportunity to study the behaviour of workers, firms and supervisors, since performance can be accurately measured and compared across agents. This thesis offers three chapters in the broad fields of labour and personnel economics, using data from professional sports to illustrate. In Chapter One, we consider the role of Head Coaches at football clubs, and whether teams can benefit from Head Coach turnover. This extends on previous work on this topic along several lines. Most notably, Head Coach turnover can either be voluntary or involuntary. In a principal-agent framework, these are theoretically two quite different events, with each producing different predictions about changes to team performance. We also use data from multiple leagues and can distinguish between a short run “bump” effect, and a longer run learning effect. Results show that teams can benefit from Head Coach turnover, particularly following a dismissal, though the result is sensitive to how we define our follow up period. In Chapter 2, we examine the ability of baseball pitchers to switch between different tasks, by considering how their pitching performance is affected by the additional demands of having to bat and run bases. Despite the prevalence of task switching in modern day work, there is a surprising lack of empirical evidence on its effects on productivity. Baseball is an ideal setting to consider this question empirically, making use of the two-league structure of Major League Baseball. In one league, pitchers are faced with a forced task switching rule of having to both pitch and bat, while in the other, pitchers can focus on their primary job; pitching. The structure of the game of baseball, consisting of innings and a batting order, also means we can cleanly identify cases of workers switching back and forth between tasks. Our results indicate that pitchers can actually benefit from batting, but at all costs should avoid excessive fatigue after running bases. Finally, in Chapter 3, we return to Coaches, this time in the National Football League. We examine the determinants of coaching changes at the levels of Head Coach and Coordinator. In particular, we pay close attention to the role of the league’s affirmative action policy, the Rooney Rule, on the likelihood of minority coaches being appointed to a Head Coaching role. Results suggest that the rule has been somewhat successful, since teams now appear to be hiring equally skilled black and white coaches, despite evidence that there had always been a supply of equally skilled black coaches.