The Effect of Relative Newcomer Performance on Risk-taking and Productivity
(joint with Philip Yang and Xian Xu)
This study investigates the effect of relative newcomer performance - that is, the ratio between newcomer and team performance - on engagement in “high risk, high reward” tasks during early stages of an employment relationship. It further analyzes the long-run effects of these choices on worker productivity. Using data on NBA-players, we find that relatively good newcomers are more willing to engage in “high risk, high reward” tasks. Our results further show that (successful) engagement in risky activities during early career stages has a permanent positive effect on worker productivity, presumably due to specialization.