Is there a nationality wage premium in European football?

Abstract

We investigate the presence of nationality salary premia in two top European football leagues (the Premier League and Serie A). We uncover a substantial pay premium for South American players (primarily driven by Argentina and Brazil) of between 11 and 15 per cent in magnitude. We investigate possible mechanisms, such as whether these salary effects are driven by new entrants to the league, and whether they are reflected in team attendances and team performance. Fans appear to respond to higher proportions of South American players in England, but not in Italy. We discuss the implications of these results and suggest why potential differences might exist across the leagues.