What Can International Cricket Teach Us About the Role of Luck in Labor Markets?

Shekhar Aiyar and Rodney Ramcharan

No 2010/225, IMF Working Papers from International Monetary Fund

Abstract: How important is luck in determining labor market outcomes? We address this question using a new dataset of all international test cricketers who debuted between 1950 and 1985. We 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 us to identify the role of luck - factors unrelated to ability - in shaping future career outcomes. We 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. We also make headway in empirically distinguishing between competing explanations for why exogenous initial conditions exercise a persistent impact on career performance

Keywords: WP; debut location; test cricket; batting average; debut performance; debut series; series performance; debut dummy; entry decision; Human capital; Labor markets; Value-added tax; Capital accumulation; Job search and matching assistance; Caribbean (search for similar items in EconPapers)
Pages: 29
Date: 2010-10-01
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Citations: View citations in EconPapers (3)

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