This paper investigates whether early career exposure of unexperienced employees to employers affects their later career outcomes. The extent to which entry-level workers get to demonstrate their abilities is an important determinant of how precisely the employer can estimate their talent. A common difficulty in the literature is finding relevant measures of how often the employer observes an employee. To this end, I use high frequency worker-level data from the National Hockey League, where in-game playing time serves as the measure of exposure. I implement a novel instrumental variable strategy, exploiting co-worker injuries as a source of random variation in junior worker playing time. Co-worker injuries create vacant slots in team rosters, which are usually filled by junior workers, increasing their exposure. Consequently, there is a positive correlation between the number of co-worker injuries that occur and the number of playing opportunities that a junior worker gets during their entry-level career. Using co-worker injuries as an instrument, the results indicate that total entry-level career playing time significantly increases a junior worker’s likelihood of being rehired as well as their post entry-level salary.
Podcast where I discuss this paper Link (Economisch Statistische Berichten)
2. Skill Adoption, Learning and Diffusion: Evidence from Soviet-style Hockey.
(with Francesco Amodio and Jeremy Schneider)
– R&R, Management Science
How does the arrival of workers with new skills affect existing workers? We examine how the large influx of Soviet born hockey players in the National Hockey League (NHL) after 1989 affected other players. The Soviet style of hockey was largely based on skilled skating, constant movement, circling and passing. In contrast, the North American play was more individualistic and linear, with higher emphasis on physical strength. Using 50 years of data at the player-game level, we show that (i) the number of penalty minutes per game increased steadily from 1970 to 1989, while decreasing thereafter; (ii) these trends are driven by North American born players while Soviet born players have systematically less penalty minutes per game upon arrival and throughout the post-1989 period; (iii) the number of penalty minutes per game of North American born players decreases systematically with the number of Soviet born players on their team and on their opponents’ team; (iv) the Soviet style of hockey becomes predominant among championship winners over time and irrespectively of the number of Soviet born players on the team. Evidence shows that the new skills brought about by new players are learned by other players and diffuse among other organizations.
We assess the proclaimed pro-competitive effects of the “transfer system”, the no-poaching agreement governing the European football (soccer) labor market. A major argument to legitimize this system is that transfer fees, which hiring clubs pay to release players from their current clubs, redistribute revenues from large market to small market clubs. This would strengthen small clubs’ financial clout and their ability to compete in sporting terms. Player transfer fees represent over 10 billion Euros in asset value in the financial statements of the 202 clubs we analyze. Still, small market clubs rarely obtain substantial revenues from the transfer market. The main beneficiaries are clubs around the middle of the market size distribution. A select group of large market clubs makes significant transfer losses, but this does not undo their initial financial advantage. Overall, the transfer system therefore leads to a very minor reduction in revenue inequality.
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