Job market paper: Identifying the Value of Teamwork: Application to Professional Tennis
Teamwork is a first order concern for any organization bigger than a single individual. This paper provides a novel identification approach to measure value-added from teamwork net of solitary work. Holding constant the assigned task, compare a worker’s contribution to output when acting alone versus when working in a team. Define the discrepancy between the two as that worker’s value-added due to teamwork.
Identification works as follows. Identify a worker’s net value added to a team by difference-in-differences, observing workers who switch teams; call this composite skill. The part of composite skill explained by solitary performance is own skill: the common component across solitary and team production. The orthogonal component of composite skill unexplained by solitary performance is team skill: a worker’s value-added to a team in excess of own skill. This measures that worker’s comparative advantage at teamwork relative to solo work.
The key identification criterion is the observation of a worker’s solitary productivity at the given task outside the context of any team. Professional men’s tennis provides the ideal setting to compare workers’ solitary and team output. Players participate in both singles and doubles categories, with singles providing a clean measurement of a player’s own skill. I find that nearly 60\% of across-team output variation is explained by team skill, compared to 20\% by own skill. This is robust to a variety of specifications, including nonlinearities in player inputs. Players match positively assortatively by both own skill and team skill dimensions, but do not sort interdimensionally. This implies higher skilled players receive returns to skills by virtue of being matched to higher skilled partners; these are in the order of half the magnitude of the direct returns.