The Nappy Factor in Golf: The Effect of Children on the Sporting - PowerPoint PPT Presentation

The Nappy Factor in Golf: The Effect of Children on the Sporting Performance of Professional Golfers Tony Syme BECOME UNSTOPPABLE

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Economic Effects • Motherhood Penalty vs Fatherhood Premium Earnings: • Lundberg & Rose (2000): first child associated with 5% reduction in mother’s wage rate and 9% increase in the father’s Hours of Work: • Lundberg & Rose (2000): first child associated with 45% reduction in hours of work for mothers and no significant change for fathers • No significant labour markets impacts from second child onwards

If First-Born is a Son… • Reduces probability of divorce • Increases levels of general as well as marital satisfaction • Much higher for fathers than mothers (75% vs 14%; Kohler, Behrman and Skytthe, 2005) • Fathers spend more time with children • Linked to smaller family sizes • More likely to vote Conservative/Republican than Democrat/Labour/Liberal Democrat For general review, see Lundberg, S. (2005) ‘Sons, Daughters and Parental Behaviour’, Oxford Review of Economic Policy, 21(3), 340-56

Age-Earning Profile • Age-earning profile linked to increasing and deteriorating human capital Problems • Other factors with same profile may impact earnings • Work experience proxied by age not controlled for • Selection bias – transition to retirement for high earners

Golf: Age-Earning Profile Source: https://golfanalytics.wordpress.com/2013/10/11/the-aging- curve-for-pga-tour-golfers-part-ii/

Becker’s Human Capital Model • Household division of labour as a household utility maximisation exercise • See conference proceedings paper for derivation of first-order conditions • Degree of specialisation within household depends on relative market wages and productivities within the home • Marginal utilities from time and effort spent at home will change with fatherhood and again with further children

Data Source • PGA Tour – 225 professional golfers, 1996-2016 Benefits: • Ability to change productivity/earnings immediately following birth of child • Productivity and earnings directly measurable • Relatively long time period for longitudinal study

Prize Money Distribution 20% 18% 16% 14% Prize Money % 12% 10% 8% 6% 4% 2% 0% 1 3 5 7 9 111315171921232527293133353739414345474951535557596163656769 Position

Empirical Specification is either score or ln(earnings) is a vector of human capital explanatory variables: age, plus its quadratic term, number of years as a professional golfer prior to joining the PGA Tour, and a dummy variable indicating the player’s first season on the PGA Tour is a vector of child variables: number of children, ages of children, and gender of children is the unobserved heterogeneity term, assumed to be individual-specific and time-invariant

Effect of Children Dependent variable Score Score Score Ln(Money) Ln(Money) Ln(Money) (1) (2) (3) (4) (5) (6) Independent variable Child -0.093*** -0.084*** 0.104*** 0.099*** (0.032) (0.032) (0.026) (0.026) Fatherhood Years -0.013*** 0.016*** (0.004) (0.003) One Child -0.098*** 0.103*** (0.033) (0.026) Two Children -0.078* 0.102*** (0.042) (0.033) Three or more Children 0.231*** -0.041 (0.058) (0.046) � � � 0.153 0.155 0.153 0.157 0.157 0.157 Number of observations 43,228 43,228 43,228 26,641 26,641 26,641 • Baseline results: • Players with children earn 10% per tournament more than childless men • Effect increases slightly over time and holds for the first two children, but not from third child onwards

Effect of Child Gender Dependent variable Score Score Ln(Money) Ln(Money) (1) (2) (3) (4) Independent variable One Child (Boy) -0.093** 0.161*** (0.043) (0.034) Earnings impact drops to One Child (Girl) -0.127*** 0.057 (0.046) (0.035) 10-12% if two children Two Children (Boy, then Girl) -0.040 0.119** and first was a son (0.062) (0.048) Two Children (Girl, then Boy) 0.072 -0.037 Positive impact of (0.061) (0.047) Two Children (Both Boys) -0.029 0.096** daughters is not found in (0.059) (0.047) Two Children (Both Girls) -0.475*** 0.219*** other studies (0.072) (0.054) At Least Three Children 0.210*** -0.053 (0.058) (0.046) Number of Boys 0.058 0.096*** (0.045) (0.036) (Number of Boys)^2 0.011 -0.042*** (0.017) (0.014) Number of Girls -0.263*** 0.126*** (0.052) (0.041) (Number of Girls)^2 0.134*** -0.076*** (0.023) (0.019) • Fathers earn 16% more than childless men if only child is a son; no increase if only child is daughter

Effect of Child Age Dependent variable Score Ln(Money) • Permanent positive (1) (2) Independent variable First Child, aged 0-2 -0.090*** 0.092*** increase in productivity (0.033) (0.026) First Child, aged 3-5 -0.067 0.158*** and earnings following (0.049) (0.038) First Child, aged 6-8 -0.130** 0.225*** (0.061) (0.047) birth of first child First Child, aged 9-11 -0.432*** 0.384*** (0.072) (0.056) • Very different for second First Child, aged 12-14 -0.536*** 0.543*** (0.086) (0.067) child – significant and First Child, aged 15-17 -0.607*** 0.509*** (0.106) (0.082) Second Child, aged 0-2 -0.010 -0.053 sizeable negative effects (0.043) (0.033) Second Child, aged 3-5 0.099* -0.078* from age 6 onwards (0.059) (0.045) Second Child, aged 6-8 0.348*** -0.271*** (0.075) (0.058) Second Child, aged 9-11 0.562*** -0.429*** (0.095) (0.073) Second Child, aged 12-14 0.887*** -0.587*** (0.125) (0.097) Second Child, aged 15-17 0.918*** -0.313** (0.177) (0.132) At Least Three Children 0.258*** -0.143*** (0.050) (0.039)

Effect of First Child Dependent variable Score Ln(Money) • If first child is a son: (1) (2) Independent variable • Immediate and First Child, Boy aged 0-2 -0.076* 0.129*** (0.042) (0.034) First Child, Boy aged 3-5 -0.009 0.198*** permanent positive (0.056) (0.044) First Child, Boy aged 6-8 -0.231*** 0.290*** increase in earnings, but (0.066) (0.052) First Child, Boy aged 9-11 -0.457*** 0.388*** effect on productivity (0.078) (0.061) First Child, Boy aged 12-14 -0.498*** 0.595*** limited until age 6 (0.094) (0.072) First Child, Boy aged 15-17 -0.523*** 0.537*** • If first child is a daughter: (0.113) (0.084) First Child, Girl aged 0-2 -0.094** 0.056 • Increase in productivity (0.046) (0.036) First Child, Girl aged 3-5 -0.118* 0.073 (0.064) (0.050) and earnings largely only First Child, Girl aged 6-8 0.044 0.073 (0.080) (0.063) follows nine years into First Child, Girl aged 9-11 -0.353*** 0.332*** (0.095) (0.074) fatherhood First Child, Girl aged 12-14 -0.564*** 0.453*** (0.117) (0.090) • No gender differences for First Child, Girl aged 15-17 -0.857*** 0.448*** (0.168) (0.130) later children (Results for later children not reported)

Overall Results 1. Fatherhood increases PGA Tour golfers’ earnings by 10% and this rises to up to 16% if first child is a son 2. Further children reduce the fatherhood premium, but only from school age onwards 3. First-born sons have greater impact on fathers’ earnings than productivity • Relevance of tournament theory (Lazear & Rosen, 1979): wage differences not based on differences in marginal productivity, but on relative rank • First-born sons make fathers more competitive and perform better under pressure