Intuition and sports knowledge suggest that the most talented professional footballers play for the best teams, i.e., positive assortative matching based on productivity. We consider Major League Soccer (MLS) between 2007 and 2017. We estimate a wage equation, finding that player and team fixed wage premiums are negatively correlated. This is a puzzle, especially because our estimates of players’ wage premiums do correlate strongly with measures of their performance on the pitch, and there is evidence of positive teammate sorting. However, the estimated wage premiums of MLS teams are...Read more
