Globalized Market for Talents and Inequality: What Can Be Learnt from European Football?

This paper takes advantage of the availability of rich panel data on the mobility of talented football players, and the performances of national leagues and teams to quantify the effect of the reduction in mobility restrictions, the 1995 Bosman rule, on global efficiency and cross-country inequality in football. I built a micro-founded model endogenizing migration decisions, inequality and training; I estimated its structural parameters; and I used numerical simulations to compare actual data with a counterfactual no-Bosman trajectory. I found that the Bosman rule (i) increased global efficiency in football by 20% (ii) increased cross-leagues inequality in performance by 25% in terms of output, and (iii) decreased inequality across national teams by 70% .Countries from Africa, South (except Argentina and Brazil) and Central America have produced more talents and benefitted from brain-gain type effects. My results also show that this brain-gain mechanism is the major source of efficiency gains. However, it plays only a minor role in explaining the rising inequality.