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

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  • Mr. Shekhar Aiyar
  • Mr. Rodney Ramcharan

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

Suggested Citation

  • Mr. Shekhar Aiyar & Mr. Rodney Ramcharan, 2010. "What Can International Cricket Teach Us About the Role of Luck in Labor Markets?," IMF Working Papers 2010/225, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2010/225
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    1. Burke Paul J., 2012. "Economic Growth and Political Survival," The B.E. Journal of Macroeconomics, De Gruyter, vol. 12(1), pages 1-43, March.
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    3. Anthony J. Vine, 2016. "Using Pythagorean Expectation to Determine Luck in the KFC Big Bash League," Economic Papers, The Economic Society of Australia, vol. 35(3), pages 269-281, September.

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