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The effects of negative labor market conditions at entry: Evidence from the 2004–05 NHL lockout

Author

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  • Hua, Chengyuan
  • Humphreys, Brad R.

Abstract

We investigate the impact of a large negative labor market shock on short-run and long-run labor market outcomes of new entrants exposed to this shock. The shock, a labor dispute over a new collective bargaining agreement, resulted in the cancellation of the entire 2004–05 season in the National Hockey League (NHL). We compare career outcomes of new entrants exposed to this shock, players who declared for the 2004 draft, to career outcomes of new entrants in the 2003 draft who were not exposed, generating estimates of the average impact of the treatment on the treated. Results show that new entrants exposed to the shock experienced shorter careers than new entrants in the control group. The results also show strong effect heterogeneity based on observable worker characteristics. New entrants born in Europe benefited from exposure to the shock compared to new entrants born in North America, who were less likely to ever play in the NHL and had shorter careers than treated Europeans. Alternative employment opportunities in European hockey leagues represents a likely mechanism for these results.

Suggested Citation

  • Hua, Chengyuan & Humphreys, Brad R., 2025. "The effects of negative labor market conditions at entry: Evidence from the 2004–05 NHL lockout," Labour Economics, Elsevier, vol. 97(C).
    • Handle: RePEc:eee:labeco:v:97:y:2025:i:c:s0927537125001496
    DOI: 10.1016/j.labeco.2025.102825
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    Keywords

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    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
    • Z22 - Other Special Topics - - Sports Economics - - - Labor Issues

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