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Income inequality in pro sports

2009 October 21
by Skip Sauer

Mark Perry has a neat post at The Enterprise Blog, looking at income inequality in the NFL. As elsewhere in the economy, the long term trend is increasing, for both median income and income inequality.

Perry states that rising income inequality “is a natural and expected outcome of … the expanded opportunities that come from larger and increasingly competitive global markets.” Is this so, especially for the NFL? Clearly, income inequality should increase with an increase in the dispersion of skill (productivity) across players. Players today are more skilled than ever before, and it may be that increases in the level of skill and increases in the dispersion of skill go hand in hand. If this argument is correct, then MLB, NBA, and NHL data should be moving in the direction that Perry documents for the NFL.

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