The Wombles were right: exercise is good for you, laziness is not. What’s more, exercise isn’t just good for your health - it’s good for your wallet too. 
A new paper by Michael Lechner estimates that people who participate regularly in sport earn €1200 a year more than those who don’t - which suggests the return to playing sport is about one-third that of a degree. And this return comes even years after you play.
Of course, it could be that people likely to earn more just happen to play sport anyway - as they are slimmer and healthier than average. But Lechner tried to control for this.
But why does playing sport cause your wages to rise? The obvious possibility is that it makes us healthier and therefore more productive. But this explains only around one-fifth of the effect.
Another possibility is that sport makes us happier, and happier folk are more productive. This is a big effect for women, but not for men.
Which leaves another possibility. Sport is a way of networking; we meet potential employers and customers on the golf course or at the squash club.
Of course, it could be that people likely to earn more just happen to play sport anyway - as they are slimmer and healthier than average. But Lechner tried to control for this.
But why does playing sport cause your wages to rise? The obvious possibility is that it makes us healthier and therefore more productive. But this explains only around one-fifth of the effect.
Another possibility is that sport makes us happier, and happier folk are more productive. This is a big effect for women, but not for men.
Which leaves another possibility. Sport is a way of networking; we meet potential employers and customers on the golf course or at the squash club.
This is no surprise to common sense. But it’s yet another challenge to human capital theory. For this to explain earnings differentials, human capital must be very widely defined - to include not just technical skills and experience, but also your contacts, height, handedness, looks and so on.
But doesn’t there come a point when a concept becomes so widely defined as to be meaningless?
I don't buy causal relationship here. It seems completely reasonable to me that the kind of people who exercise (take care of themselves, have energy and ambition) are naturally the same kind of people who excel in their careers.
Posted by: Ben Hughes | July 01, 2008 at 01:02 PM
Competitiveness.
Posted by: Bruce | July 01, 2008 at 01:57 PM
The paper does try to control for this selection effect. Even if the controls are inadequate, however, the relationship might still be causal.
A naturally competitive person would be attracted to sport. But in playing he'd learn just how hard it is to master a skill. And he might figure: "if I have to work this hard just to be a mediocre tennis player, maybe I have to work really hard to be good at my job." Sport then causes productivity, even if it initially only attracts the competitive type.
Posted by: chris | July 01, 2008 at 02:27 PM
How was 'sport' defined? is it inclusive of things like swimming? Is golf a sport, or a game? ditto darts.
Sport is not synonymous with skill - if you can run fast, or lift heavy weights, is this a skill? racing or lifting tactics, ok might be a skill, if you do it competitively.
Sport also involves things like committment, effort, teamwork (in some cases) which might be useful in a career too. And its in a social setting, and you can compete in a sports club etc and be friends afterwards.
Sport is such a wide definition and the difference in people's experiences would be vast, I'd imagine.
Posted by: Glenn | July 01, 2008 at 03:53 PM
Few more reasons:
1. People who play sports are more confident about themselves, they're more social (sports are generally social events) so they're better at negotiating salaries and selling themselves, crucial skills for improving pay.
2. According to John Medina (http://www.youtube.com/watch?v=IK1nMQq67VI), sports and in particular aerobic exercise helps us learn better and improve our intellectual abilities. It's supposed to be all wired in our brain and all due to the survival of the fittest.
3. I'm no statistician, but there must be a strong correlation between: playing sports (generally zero-sum games that develop an ambition to win) - ambition - career success - pay.
Posted by: techiella | July 01, 2008 at 07:20 PM
Whether football makes us healthier (my wrist, and others' knees and ankles, would have a few things to say about this), clears our minds of clutter, or helps us 'bond', the company I work at seems to believe so (or most likely writes it off as a perk). Thus we're allowed 1-2 hours off a week to play a sport at the local leisure centre. So in this case, my higher income has simply coincided with (and my job change was the cause of) my playing much more sport than before. I'm not entirely sure if that's been factored-in.
Posted by: B4L | July 01, 2008 at 09:33 PM