infonet-economy

Torgler and Schmidt (2007) have recently found a positive impact of pay on player performance in German soccer,
measured by the number of goals and assists scored within a season. This note shows that their result is spurious as
both a player's wage and goal/assist scoring are driven by individual playing abilities. Holding the (unobserved) timeinvariant
and the varying talent of a player constant, the positive pay-performance link is no longer statistically
significant. In professional soccer, wages seem to buy talent rather than motivation.