The Productivity Returns to the Global Search for Talent: Evidence from Major League Baseball Play-by-Play Data

While the United States labour civilian labour force is nearly 20% foreign-born, the percentage of foreigners in most professional sports labour markets is closer to 30%. Moreover, the foreign percent in these markets has nearly tripled over the past 40 years. Traditional studies into the foreign-born’s impact on professional sports markets have typically used measures of the foreign-born that do not take into account their usage, both in terms of rate and of positions, possibly introducing a degree of sample bias. We use Major league Baseball event, i.e. play-by-play, data and measure the foreign component ‘on the field‘ for any given event. This usage measure indicates that the foreign-born, in terms of direct impact, are considerably larger than indicated by other measures. We, further, incorporate a simple and direct measure of productivity — the ability to record an out — and examine the foreign component’s impact on this measure. In the end, we find that the impact of the foreign-born was disparate among positions with much of the gains focussed on defensive positional players. Also, the impact of the foreign-born on two specific positions — pitching and hitting — was either non-existent, small or in the opposite direction than might be predicted. However, any positive impact of country of origin diversity had largely dissipated by the turn of the 21st century.