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

Abstract

How important is luck in labor market outcomes? This paper uses a new dataset of all international test cricketers who debuted between 1950 and 1985 to address this question. 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 — a good first job — perform significantly better on debut. We also find that debut performance has a large and persistent impact on long run career outcomes in part because team managements use information inefficiently.

Keywords: luck, labor market

JEL Classification: J2, J4, J6