A working paper published by the National Bureau of Economic Research found at nearly 16% of NFL players filed for bankruptcy within 12 years of retirement.
The authors of the paper — Kyle Carlson (Cal Tech), Joshua Kim (University of Washington), Annamaria Lusardi (George Washington), and Colin F. Camerer (Cal Tech) — studied 2,016 players drafted between 1996 and 2003.
Despite the fact that players with median-length careers made $US3.2 million in NFL salary during that period, the study found that 15.7% of players filed for bankruptcy within 12 years of leaving the league.
Ben Leubsdork of the Wall Street Journal first reported on the study.
That bankruptcy rate is similar to the national average across all 25-to-34 year olds, the study notes, even though NFL players make significantly more money than their 25-to-34 year old peers. The average NFL player makes more money in six years than the average college graduate will make in their lifetime, the study says.
Furthermore, career length and total earnings have little effect on whether an NFL player will declare bankrupt.
“Having played for a long time and having been a successful and well-paid player does not provide much protection against the risk of going bankrupt,” the study says.
NFL spokesperson Brian McCarthy said the league has yet to review the paper.
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