The relative age effect on labour market outcomes–evidence from Italian football

Research question: This study investigates whether the relative age effect (RAE) persists in the long term and affects Italian-born footballers’ performance and wages. Research methods: A unique dataset on 1700 individual players’ remuneration and performance was collected and analysed through the chi-square goodness-of-fit, the Spearman’s rank correlation and an econometric model. Results and findings: This study contributes to the literature by providing clear results on long-term RAE. We find evidence of the RAE in terms of representativeness, which means that, in an age group, players born relatively early are over-represented, while those born relatively late are under-represented, even accounting for national birth trends. Moreover, although they perform similarly, the gross wages of players born relatively late are statistically significantly lower than those of players born relatively early. Implications: This situation needs to be considered by various football stakeholders and tackled accordingly to minimize the loss of potential youth football talent. Further research is needed to identify the determinants of RAE in the long term.