Labor Supply on the PGA TOUR

Abstract

The unique nature of the PGA TOUR allows exempt players to have a large measure of discretion in the number of tournaments they enter in a given year. Recent policy changes on the PGA TOUR suggest that TOUR players may be responsive to exemption status and expected earnings. Using the previous year’s real earnings per event as a proxy for expected earnings and controlling for player effects and exemption status, ordinary least squares results indicate that players’ annual entry decisions change with an exemption status change but not with higher expected earnings. An exempt, non-elite PGA TOUR player whose exemption is set to expire in at least 2 years enters slightly fewer tournaments, whereas an increase in expected earnings has no effect on tournaments entered. This suggests that the PGA TOUR would do well not to ignore possible effects of future policy changes on player annual entry decisions.