Year of Publication

2011

Degree Name

Doctor of Philosophy (PhD)

Document Type

Dissertation

College

Business and Economics

Department

Economics

First Advisor

Dr. Christopher Bollinger

Second Advisor

Dr. John Garen

Abstract

I use data from the National Football League (NFL) to analyze the impact of minimum salaries on an employee’s firm tenure, an employee’s career length, and an employer’s distribution of employee experience. The NFL has a salary structure in which the minimum salary a player can receive increases with the player’s years of experience. Salary schedules similar to the NFL’s exist in public education, Secret Service, Internal Revenue Service, other federal government agencies, the Episcopalian church, and unionized industries. Even though the magnitude of the salaries in the NFL differs from other industries, this study provides insight to the impact of this type of salary structure firm tenure, career length, and the experience distribution.

In the first essay, I analyze the impact of minimum salaries on firm tenure and career length for six positional groups in the NFL, defensive backs, defensive linemen, linebackers, running backs, tight ends, and wide receivers. A major advantage of using NFL data is that I am able to control for a player’s productivity. I find statistically significant evidence that minimum salaries shorten firm tenure and career length when they require teams to increase a player’s base salary from year t to year t+1 or a player’s total compensation from year t to year t+1.

In the second essay, I analyze the impact of minimum salaries on the experience distribution. I exploit the fact that the NFL’s minimum salary schedule causes the relative minimum price between two experience levels to change over time. This provides teams with an incentive to substitute away from the experience level whose relative minimum price becomes more expensive. I find evidence that when relative minimum prices change, the experience distribution changes.

Included in

Economics Commons

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