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Wage discrimination in the NBA: Evidence using free agent signings

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  • Candon Johnson
  • Eduardo Minuci

Abstract

This article takes a step toward understanding potential causes of wage discrimination in an economy highly dependent on the service industry. Traditionally categorized within the service industry, professional sport leagues such as the National Basketball Association (NBA) provides a unique setting to examine the potential impact of race on salary. We analyze free agency contract signings, which allow us to better capture the determinants of players' wages, from 2011 to 2017 to investigate the prominence of wage discrimination in the NBA. Using weighted linear regression models and the Oaxaca–Blinder decomposition, we find that Black athletes are paid significantly less than their counterparts. In addition, we also identify the presence of consumer discrimination after controlling the exposure of a player to the audience, which is observed through the interaction term between the share of MSA population which is White and an identifier for whether a player is Black.

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  • Candon Johnson & Eduardo Minuci, 2020. "Wage discrimination in the NBA: Evidence using free agent signings," Southern Economic Journal, John Wiley & Sons, vol. 87(2), pages 517-539, October.
    • Handle: RePEc:wly:soecon:v:87:y:2020:i:2:p:517-539
    DOI: 10.1002/soej.12461
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    References listed on IDEAS

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    3. David J. Berri & Richard C. K. Burdekin & Christian Deutscher, 2022. "Nationality Effects on the Allocation of Playing Time in the Chinese Basketball Association: Xenophilia or Xenophobia?," Journal of Sports Economics, , vol. 23(2), pages 156-174, February.
    4. Forth, John & Theodoropoulos, Nikolaos, 2022. "Earnings Discrimination in the Workplace," GLO Discussion Paper Series 1110, Global Labor Organization (GLO).
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    6. Scott M. Kaplan, 2022. "Putting a price on popularity: Evidence from superstars in the National Basketball Association," Economic Inquiry, Western Economic Association International, vol. 60(3), pages 1357-1381, July.
    7. Joseph Kuehn & Filippo Rebessi, 2023. "The Importance of Team Fit for NBA Rookies’ Career Earnings," Journal of Sports Economics, , vol. 24(3), pages 285-309, April.

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