Effort reduction of employer-to-employer changers: Empirical evidence from football

We investigate changes in effort investment of employees who still fulfill a contract with their current employer but already signed a follow-up contract with a new employer (employer-to-employer change). Because effort and outside contract assignments are hard to measure in firms, we use running data from professional football (n = 26,577) to proxy effort decisions. Fixed effect regressions reveal a statistically significant but weak reduction in a player's effort after signing a follow-up contract with a new club. Because we find a statistically significant effort reduction in public sports, this effect might be even larger in less transparent labor markets.