Additional evidence for the career concern hypothesis with uncertainty of the retirement period - the case of professional baseball players in Japan
This paper examines whether the Career Concern Hypothesis, which Gibbons and Murphy (Journal of Political Economy, 100, 1992) have presented, holds in the labour market of professional baseball players in Japan. The hypothesis emphasizes that if workers are concerned about their career, an optimal compensation contract has two incentives - an explicit incentive from compensation for current performance and an implicit incentive from concern about their career - and predicts that the explicit incentive should be strongest for workers close to retirement because the concern for their career is weakest for these workers. Incorporating the uncertainty of the retirement period, evidences are found supporting the Career Concern Hypothesis.
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