What Can International Cricket Teach Us About The Role Of Luck In Labor Markets?

How important is luck in determining labor market outcomes? The authors address this question using a new dataset of all international test cricketers who debuted between 1950 and 1985. They present evidence that a player's debut performance is strongly affected by an exogenous source of variation: whether the debut series is played at home or abroad. This allows them to identify the role of luck - factors unrelated to ability - in shaping future career outcomes. They find that players lucky enough to debut at home perform significantly better on debut. Moreover, debut performance has a large and persistent impact on long run career outcomes. They also make headway in empirically distinguishing between competing explanations for why exogenous initial conditions exercise a persistent impact on career performance.

Provided by: International Monetary Fund Topic: Big Data Date Added: Oct 2010 Format: PDF

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