27.05.2021

Labor market effects of sports related public expenditures

27.5.2021 – A study jointly funded by the German Research Foundation (DFG) and the Swiss National Science Foundation (SNF) reports for the first time a causal effect of local sports related expenditures on individual labor market outcomes. Results are now published in the official journal of the European Association of Labour Economists.

By merging administrative data on public finances of all municipalities in Germany with individual data from the German Socio-Economic Panel (SOEP), researchers from the University of Tübingen (Institute of Sports Science, PI: Tim Pawlowski) and the University of St. Gallen (Swiss Institute for Empirical Economic Research, PI: Michael Lechner) explored whether local public expenditures on sports facilities influences individual labor market outcomes.

The identification strategy in the project follows a selection-on-observables approach and exploits the panel structure of the data covering 12 years between 2001 and 2012. The results of various matching estimations suggest that both women and men exposed to high annual expenditure levels (i.e. €31–€85 per capita) over 5 years, obtain approximately €150 of additional household net income on average. However, this income effect is captured by earning gains for men rather than for women living in the household.

Additional analysis suggests, that these gender differences, which can also be observed in terms of working time, hourly wage and employment status, appear plausible since women in the age cohort under consideration are less likely to engage in sports in general, and in any of the publicly funded sports facilities in particular. Moreover, improved well-being and health are possible mechanisms through which the positive labor market effects for men may unfold.

Funding: Supported by the German Research Foundation and the Swiss National Science Foundation

Reference: Pawlowski, T., Steckenleiter, C., Wallrafen, T., & Lechner, M. (2021). Individual labor market effects of local public expenditures on sports. Labour Economics, doi.org/10.1016/j.labeco.2021.101996

Paper: PDF

YouTube presentation: Reading Online Sport Economics Seminar (ROSES)

Press release: Förderung der Sportstätten wirkt sich positiv auf Gehälter vor Ort aus

Media reports: Der Spiegel, SPONSORs, SWR, Bayern 2

Background knowledge: Sanierungs- und Modernisierungsbedarf von 31 Milliarden Euro (Behörden Spiegel)