DP6886 Long-run Labour Market Effects of Individual Sports Activities
URL: www.cepr.org/DP6886
Author(s): Michael Lechner
The positive effects of physical activity on individual health are widely recognised. The author of CEPR DP6886 analyses this relationship and goes beyond to discover the effects of participation in leisure time sports on individual labour market outcomes, specifically earnings.
Using data from the German Socio-Economic Panel study from 1984 to 2006, he first looks at who participates in leisure sports activities and finds that men participate more than women, Germans more than non- Germans, and participation increases with education, earnings and 'job quality'. He then turns to labour market outcomes and reveals that, as a rough estimate, playing active sports increases earnings by about 1,200 euros per year over a 16-year period compared to very little or no sports activity. This translates into a 5-10% rate of return on sports activities, which is a similar return to that seen for one additional year of schooling.
Increased health and improved general well-being (assessed by both objective and subjective measures by the author) appear to be the most relevant channels for the gain in earnings, but it appears that other channels, such as the social networking aspect of sports, are also relevant.