Talent compression is the labor market phenomenon where the average productivity differential between participants declines and has been used to explain the overall increase in competition within some professional sports markets. A finding that competitiveness is uniquely driven by talent compression is consistent with Rottenberg (1956), who argued that resource distribution is independent of factors that are invariant to labor productivity.
Rather than incorporate MLB team roster turnover as many of the past studies have done, we prefer to measure of all-star turnover in membership. Problematically, movement from an MLB team to an MLB team is limited by rule, finances and the fact that there are very few teams competing for player services. In contrast, All-Star membership is typically costlessly chosen by many millions of fans, league players and managers. In this way, All-Star voting should be invariant to many of the factors that affect movement from an MLB team to an MLB team.
In the end, we find that a close association between all-star turnover rates and the makeup of MLB’s labor pool.
The paper offers a new measure of player mobility.
Schmidt, M.B. (2020), "Labor demographics and productivity: all-star roster turnover and foreigners", Journal of Economic Studies, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JES-01-2020-0043Download as .RIS
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