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DECTI Trade Seminar: Leveling the Playing Field! National Implications of a Global Market for Football Players

Speakers:

Abstract: One of the fundamental questions in the brain drain debate is whether increased prospects for emigration of highly-skilled workers stimulate pre-migration human capital accumulation in origin countries?  Various theoretical models show that such effects might even overcome the loss of human capital through emigration so that the overall effect is positive.  With a few exceptions, empirical studies that focus on this issue are based on cross-country data so that causality is hard to establish. In this paper, we study this incentive mechanism in the field of European football, where the 1995 Bosman ruling has drastically and unexpectedly changed the functioning of the market for players and created the most liberal labor market in the world. As a consequence of the Bosman ruling, most EU leagues removed restrictions faced by all players regardless of national origin and, within a decade, the number of players from developing countries, especially from Latin America and Africa increased dramatically. We analyze theoretically and empirically the consequence of this quasi-natural experiment on the origin countries. We first examine the performance of the national teams - composed of the top players who are mostly employed in the EU leagues - as a proxy for the overall human capital accumulation effect of removal of emigration barriers. Next, we analyze the performance of domestic club teams - composed of players who did not migrate - in regional tournaments as a proxy for the net effect of Bosman ruling on the sending country after the loss of top players, i.e. the brain gain effect. There is drastic improvement of the national teams - especially from Western Africa - in the international tournaments starting in 1996, confirming the strong overall incentive effects. There is also a smaller but positive effect on the domestic clubs' performance in countries with many migrant players, indicating the validity of brain gain effect. However, this result crucially depends on whether the origin countries could expand the training capacity in the face of emigration.

 
For Information: Yasmin D Souza



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