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What Can International Cricket Teach Us About the Role of Luck in Labor Markets?
Author: Mr. Shekhar Aiyar and Mr. Rodney Ramcharan
Series:
IMF Working Papers
Volume/Issue:
Volume 2010: Issue 225
Language:
English
Publication Date:
01 Oct 2010
DOI:
https://doi.org/10.5089/9781455208906.001
ISBN:
9781455208906
ISSN:
1018-5941
Pages:
29
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
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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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
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund