Why are foreign/migrant footballers paid more than natives?

A nice post from Alex Bryson, Giambattista Rossi  & Rob Simmons on voxeu. Summarise their research on the same. They look at Italian football league but guess would apply to most..

The migrant footballers are paid more as they bring star value:

We explore two potential reasons for the migrant wage premium. The first is that those who migrate to Italy are superstar football players. ‘Superstars’ has two specific meanings in economics discussed in two seminal papers (Rosen 1981; Adler 1985). Sherwin Rosen thinks of superstars as workers who are more productive than their counterparts, while Michael Adler thinks of them as popular among consumers, such that they attract bigger audiences. In both cases, they tend to exist in settings where an individual’s productivity or popularity results in very big revenue gains for the employer, as occurs in televised sports or music concerts where the individual’s productivity is ‘scaled up’ by the technological setting in which the worker performs. The second potential reason for a migrant wage premium is the possibility that native workers are taking a wage hit for remaining in their home country.

We show that the differential partly reflects the superstar status of migrant workers, but it also reflects domestic workers’ preferences for working in their home region. Among the Italians, those playing close to their place of birth suffer a particularly large wage penalty. One can think of being ‘local’ as an amenity for which they are prepared to take a compensating wage differential. Alternatively, one might say these players are forced to accept this wage in the face of employer monopsony power, something that does not affect the migrant workers.

They even bring value to their teams:

Do football clubs benefit from this migrant talent? The answer is – yes. We estimate players’ contributions to team wins and fan attendance at games which, in our data, are the key determinants of team revenues. We do so by looking at changes in points won and crowd attendance within each team season-on-season and comparing it to changes in the share of migrants in the team. We find that a 1% increase in the standard deviation of migrant share increases crowd attendance at games by just under 1%. The effect on the number of points a team earns is of a similar magnitude. These increases in team points and crowd attendance with the rise in the percentage of migrants in the team are strong indicators of migrants’ superstar status.

Messis of the world can argue for even more more money citing this paper now…