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

30 Pages Posted: 26 Sep 2009 Last revised: 20 Apr 2010

Shekhar S. Aiyar

International Monetary Fund (IMF)

Rodney Ramcharan

University of Southern California, Price School of Public Policy

Date Written: September 25, 2009

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

Suggested Citation

Aiyar, Shekhar S. and Ramcharan, Rodney, What Can International Cricket Teach Us About the Role of Luck in Labor Markets? (September 25, 2009). Available at SSRN: https://ssrn.com/abstract=1478408 or http://dx.doi.org/10.2139/ssrn.1478408

Shekhar S. Aiyar

International Monetary Fund (IMF) ( email )

700 19th Street NW - HQ 5-403
Washington, DC 20431
United States
202-623-8638 (Phone)

Rodney Ramcharan (Contact Author)

University of Southern California, Price School of Public Policy ( email )

Los Angeles, CA 90089
United States

HOME PAGE: http://https://sites.google.com/site/rodneyramcharan/

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