Non-compete agreements, wages and efficiency: theory and evidence from Brazilian football
Bernardo Guimaraes, Joao Paulo Pessoa and Vladimir Ponczek
The Pele Act banned non-compete agreements in Brazilian football in 1998. We explore this policy change to study how non-competes affect the labour market. The Act changed the wage profile heterogeneously, reducing young players? wages and raising salaries for older ones. Turnover increased slightly. We develop and structurally estimate a model and show that changing the parameter capturing the non-compete friction leads to the changes observed in the data. From the estimation, we recover match efficiency before and after the Act and show that efficiency gains are outweighed by distributional effects.
7 October 2025
The Economic Journal 2025
https://academic.oup.com/ej/advance-article/doi/10.1093/ej/ueaf103/8276724?guestAccessKey=
This Journal article is published under the centre's Labour programme.