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

Download or read book What Can International Cricket Teach Us About the Role of Luck in Labor Markets? written by Mr.Rodney Ramcharan and published by International Monetary Fund. This book was released on 2010-10-01 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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