ESRC End of Award Report. For awards ending on or after 1 November 2009

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1 ESRC End of Award Report For awards ending on or after 1 November 2009 This End of Award Report should be completed and submitted using the grant reference as the subject, to reportsofficer@esrc.ac.uk on or before the due date. The final instalment of the grant will not be paid until an End of Award Report is completed in full and accepted by ESRC. Grant holders whose End of Award Report is overdue or incomplete will not be eligible for further ESRC funding until the Report is accepted. ESRC reserves the right to recover a sum of the expenditure incurred on the grant if the End of Award Report is overdue. (Please see Section 5 of the ESRC Research Funding Guide for details.) Please refer to the Guidance notes when completing this End of Award Report. Grant Title Grant Reference RES The marriage premium revisited: the case of baseball Grant Start Date 01/03/2009 Total Amount 73, Grant End Date 31/08/2011 Expended: Grant holding Institution Queen Mary University of London Grant Holder Francesca Cornaglia Grant Holder s Contact Details Address School of Economics and Finance Queen Mary University f.cornaglia@qmul.ac.uk Telephone +44(0) of London Mile End Road E14NS Co-Investigators (as per project Institution application): Naomi Feldman Ben Gurion University 1. Non-technical summary Please provide below a project summary written in non-technical language. The summary may be used by ESRC to publicise your work and should explain the aims and findings of the project. [Max 250 words] A very robust finding is that married men earn more than their single counterparts. There are a number of explanations for this finding. The first is that men that tend to marry have certain unobservable characteristics like stability, loyalty and maturity that lead to higher wages in the workforce, and to better success in the marriage market. A second explanation is that marriage makes men more productive at work. That is, the division of labor between the spouses allows a man to focus more on his profession and become better at it. This also leads to higher wages. Third, this finding may simply be due to discrimination on part of the employer. Employers may perceive married men as more stable or fitting a

2 particular image and therefore promote these men more than they would single men. We focus on the latter two explanations after ruling out the first. The uniqueness of our approach is that we use data on professional baseball players, one of the few populations where we can obtain multiple measures of productivity and performance. There is little robust evidence that marriage impacts productivity but does impact wages for the highest ability players. We investigate a number of avenues as to why this may be. We find that teams with a higher fraction of married players tend to win more games, and have higher attendance at the games. We posit that spouses may impact their husband s productivity in ways that are not necessarily captured by standard productivity measures in baseball. 2. Project overview a) Objectives Please state the aims and objectives of your project as outlined in your proposal to the ESRC. [Max 200 words] Using a sample of professional baseball players, the basic research question we investigate is: Are married men (i.e., professional baseball players) more productive than their never-married counterparts when measures of performance are measured directly (holding all else equal)? More specifically we aimed at: 1. investigating the causal effect of marriage on labour market performance. 2. conducting a detailed analysis of the marriage premium effect by using a number of alternative direct and indirect measures of performance. 3. study the evolution of the marriage premium for over a century, making use of data from reevaluating the gender discrimination in the marketplace once true productivity differences are taken into account. b) Project Changes Please describe any changes made to the original aims and objectives, and confirm that these were agreed with the ESRC. Please also detail any changes to the grant holder s institutional affiliation, project staffing or funding. [Max 200 words] There have been no changes to the original project funded by the ESRC. c) Methodology Please describe the methodology that you employed in the project. Please also note any ethical issues that arose during the course of the work, the effects of this and any action taken. [Max 500 words]

3 We hand collected our database from the National Baseball Hall of Fame and Museum (HOF) located in Cooperstown, NY, USA. The main data sources were the National Baseball Library and Archive player questionnaire collection and biographical clippings files, Major League team media guides, The Sporting News Baseball Register, and Topps Baseball Cards, In addition, these main data sources were supplemented by player contracts, newspaper clippings and internet searches when necessary. Wages for players after 1988 were obtained from USA Today while prior to 1988, wages were not generally made public and were therefore collected from various sources housed at the HOF. In addition, wage data is not at all available prior to We took a simple random sample of 5,000 players (batters and pitchers) that represented 31,000 player-years and ultimately were able to recover data on marital status and/or year of marriage for roughly 27,500 player-years, wages (roughly 18,600 player-years), and race (roughly 4,800 players). The extensive data available from The Baseball Archive allows us to follow a large sample of players over the span of their careers. We utilize informal graphical representation of productivity and wage paths for both single and married players as well as a formal econometric analysis of the research question. We make use of two mainstream techniques: Ordinary Least Squares (OLS) and Fixed Effects. Both the OLS and Fixed Effects approaches, capture the effect of marital status on productivity and wages for men that are identical on other observable characteristics such as age, race, and experience. Fixed effects allows us to do this *and* also condition on *unobservable* time invariant characteristics (like loyalty, maturity) because we want to rule out these unobservable characteristics as potential reasons for why married and single men (potentially) differ in their productivity and wages. We also add that because we have men all in the same profession, we are also able to rule out the explanation that married men tend to choose higher earning professions as compared to single men. The fixed effects approach is more powerful and comes with a cost: we can only use those players for whom marital status changed during their careers (because if marital status did not change, it will be a time invariant characteristic of the player and we eliminated all time invariant characteristics in the fixed effects approach). Thus, the results in the fixed effects specification will be coming off of the 36 percent of players that switch marital status at least once during their careers while an OLS specification uses variation in marital status across players and time. Finally, because our data span well over one hundred years, certain historical events such as World War II, the Korean War, and rule changes that influence our productivity measurements over time should be taken into account. In addition to controlling for demographic information, we also control for team-ballpark, fielding position, manager, and year as well as indicator variables that capture major rule changes that may impact productivity and/or wages. d) Project Findings Please summarise the findings of the project, referring where appropriate to outputs recorded on the ESRC website. Any future research plans should also be identified. [Max 500 words] We find heterogeneity in the effect of marriage on productivity where men in the bottom third of the ability distribution experience a rather large and positive effect (though sensitive to the empirical model and weakly significant) and no effect for higher ability players. This positive effect for low ability players, however, translates into a fairly negligible effect on wages. Interestingly, players in the top third of the ability distribution see no statistically significant effect of marriage on productivity, on average, but do experience a positive and significant direct marriage effect, that is, they earn approximately percent more than otherwise comparable single players even when controlling for productivity. These findings are suggestive of the varying roles that marriage plays along the underlying ability distribution. At lower levels of ability, men benefit more from what we term indirect augmentation activities spousal actions that directly impact productivity (and higher productivity positively impacts wages). At higher levels of ability, men benefit more from what we term direct augmentation activities spousal actions that directly impact wages (for example, improving public image). We explore a number of additional outcome variables that may be impacted by

4 marital status and can provide some insight into a fuller picture of the effect of marriage on productivity and wages. We find some evidence that marriage affects the variance of performance and that high ability married players are better at extracting their economic rent (smaller gap between marginal revenue product and wages). In addition, at the team level, ballpark attendance and wins are positively correlated with the fraction of married players. Employers may prefer married players because they lead to overall greater team success that is not necessarily captured by the standard productivity measures. Because few men are professional athletes, it is natural to question whether the results from our project can be generalized beyond the sports industry. Although professional baseball is a unique occupation, it shares certain features in common with other occupations. Playing professional baseball requires long hours of practice, intense competition and significant travel. As such, we view our project as providing insight into other similarly demanding professions such as CEOs, partners at law firms, politicians, and other high level corporate executives whose measures of productivity are less straightforward. Moreover, the wife is the closest person to the life of a professional athlete. This is again, however, not unique to professional sport. The wife s accessibility to the husband s work world shares similarities to many of these other professions. Consequently, we view our project as laying the groundwork for further research, perhaps in other individual sports or demanding professions where more direct productivity measurements are able to be collected by the researcher. e) Contributions to wider ESRC initiatives (eg Research Programmes or Networks) If your project was part of a wider ESRC initiative, please describe your contributions to the initiative s objectives and activities and note any effect on your project resulting from participation. [Max. 200 words] Not applicable. 3. Early and anticipated impacts a) Summary of Impacts to date Please summarise any impacts of the project to date, referring where appropriate to associated outputs recorded on the ESRC website. This should include both scientific impacts (relevant to the academic community) and economic and societal impacts (relevant to broader society). The impact can be relevant to any organisation, community or individual. [Max. 400 words] The authors have given seminars and conferences in various Universities not only in Europe but also in many non European countries. Among these: London School of Economics, MIT, Bar Ilan University (Israel), Ben-Gurion University (Israel), Federal Reserve Board, Hebrew University of Jerusalem (Israel), Tel-Aviv University (Israel), Tulane University, University of Chicago, University of Illinois at Urbana-Champaign, and University of Michigan. The research paper has been put in the public domain as IZA Discussion Paper number 5695 and CEP, LSE number The IZA Discussion Paper No ("Productivity, Wages, and Marriage: The Case of Major League Baseball") was downloaded 388 times from the IZA website in the months following publication. Since it has repeatedly been among the monthly Top 10 downloads, it is designated with a "Top Ten" icon on the IZA website ( Our research has also received widespread media attention; eg the BBC, Forbes Magazine and the Wall Street Journal.

5 b) Anticipated/Potential Future Impacts Please outline any anticipated or potential impacts (scientific or economic and societal) that you believe your project might have in future. [Max. 200 words] As far as our scientific impact is concerned, we have produced a new database that represents an extension to an existing database (The Baseball Archive, copywrited by Sean Lahman). The database we have created includes for a large sample of baseball hand-collected marital status information, information on other factors that affect productivity that were not available in The Baseball Archive, and information on variables that affect trends over time. The database also includes a player id-year variable that can be used by other researchers interested in sports economics, gender issues, and productivity, to merge it with The Baseball Archive. We believe that this research is also very important for the wider society. A better understanding of the relationship between marriage and performance is in fact of great interest to the wider public, in particular the sociology and economics communities, for a number of reasons. For instance, the marriage premium is of particular interest for estimating gender-based discrimination in labor markets, as the male marital pay premium accounts for about one-third of estimated gender-based wage discrimination in the United States. Our analysis provides evidence as to whether there exists some basis to this observed discrimination once productivity is taken into account. You will be asked to complete an ESRC Impact Report 12 months after the end date of your award. The Impact Report will ask for details of any impacts that have arisen since the completion of the End of Award Report. 4. Declarations Please ensure that sections A, B and C below are completed and signed by the appropriate individuals. The End of Award Report will not be accepted unless all sections are signed. Please note hard copies are NOT required; electronic signatures are accepted and should be used. A: To be completed by Grant Holder Please read the following statements. Tick ONE statement under ii) and iii), then sign with an electronic signature at the end of the section (this should be an image of your actual signature). i) The Project This Report is an accurate overview of the project, its findings and impacts. All co-investigators named in the proposal to ESRC or appointed subsequently have seen and approved the Report. ii) Submissions to the ESRC website (research catalogue) Output and impact information will submitted to the ESRC website soon. iii) Submission of Datasets Datasets that were anticipated in the grant proposal have been produced and the Economic and Social Data Service will be notified.