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Minimum Pay Scale and Career Length in the NBA

Author

Listed:
  • Johnny Ducking
  • Peter A. Groothuis
  • James Richard Hill
Abstract
We use data from the National Basketball Association (NBA) to analyze the impact of minimum salaries on an employee’s career length. The NBA 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 NBA’s exist in public education, federal government agencies, the Episcopalian church, and unionized industries. Even though the magnitude of the salaries in the NBA differs from other industries, this study provides insight to the impact of this type of salary structure on career length. Using duration analysis, we find statistically significant evidence that minimum salaries shorten career length. Key Words:

Suggested Citation

  • Johnny Ducking & Peter A. Groothuis & James Richard Hill, 2012. "Minimum Pay Scale and Career Length in the NBA," Working Papers 12-02, Department of Economics, Appalachian State University.
    • Handle: RePEc:apl:wpaper:12-02
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    File URL: http://econ.appstate.edu/RePEc/pdf/wp1202.pdf
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    References listed on IDEAS

    as
    1. Parsons, Donald O, 1992. "The Internal Distribution of Union Rents: An Empirical Test of the Voting Power Model," The Review of Economics and Statistics, MIT Press, vol. 74(3), pages 439-445, August.
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    5. Johnny Ducking & Peter Groothuis & James Hill, 2015. "Exit Discrimination in the NFL: A Duration Analysis of Career Length," The Review of Black Political Economy, Springer;National Economic Association, vol. 42(3), pages 285-299, September.
    6. J. Richard Hill & Peter A. Groothuis, 2001. "The New NBA Collective Bargaining Agreement, the Median Voter Model, and a Robin Hood Rent Redistribution," Journal of Sports Economics, , vol. 2(2), pages 131-144, May.
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    8. Peter A. Groothuis & James Richard Hill, 2008. "Exit Discrimination in Major League Baseball: 1990–2004," Southern Economic Journal, John Wiley & Sons, vol. 75(2), pages 574-590, August.
    9. Lawrence M. Kahn, 2000. "The Sports Business as a Labor Market Laboratory," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 75-94, Summer.
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    Cited by:

    1. Kelly M. Hastings & Frank Stephenson, 2015. "The NBA’s Maximum Player Salary and the Distribution of Player Rents," IJFS, MDPI, vol. 3(2), pages 1-9, March.
    2. Mark C. Strazicich & Peter A. Groothuis & Tiberiu S.V. Ungureanu, 2024. "A Rising Tide Raises all Boats: The changing distribution of salaries in the NBA over time," Working Papers 24-20, Department of Economics, Appalachian State University.

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