Spillovers, Complementarities, and Sorting in Labor Markets with an Application to Professional Sports

Spillovers to productivity across workers may exist when workers produce in teams. Under certain conditions, these spillovers may cause a workerʹs marginal product to differ across different firms. Empirical examination of professional basketball finds significant spillovers to offensive productivity but finds relatively little evidence for market sorting based on spillovers. Thus, while teammate composition is important to a playerʹs success, there is no evidence for complementarity.