Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/193306 
Year of Publication: 
2018
Series/Report no.: 
IZA Discussion Papers No. 12012
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Are people prone to selecting occupations with highly skewed income distributions despite minuscule chances of success? Assembling a comprehensive pool of potential teenage entrants into professional tennis (a typical winner-take-all market), we construct objective measures of relative ability and earnings projections. We find that prospective tennis professionals are attracted to right-skewed earnings distributions, independent of mean and variance. If skewness in prize money fell to zero, males would be 23% and females 5% less likely to continue pursuing a professional career, on average. Thus, winner-take-all labor markets appear to systematically encourage those with modest talents to pursue long-shot careers.
Subjects: 
winner-take-all markets
superstar markets
labor supply
human capital
gender differences
skewness preferences
JEL: 
J22
J24
J31
J44
L83
Document Type: 
Working Paper

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