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Is There a Wage Premium or Wage Discrimination For Foreign-Born Players in the NBA?

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  • James Richard Hill
  • Peter A. Groothuis

Abstract

The influx of international players into the NBA has led researchers to investigate whether either pay discrimination or a pay premium exists for these new entrants. The results have been mixed. An early article, Escher et al. (2004) find evidence that foreign-born NBA players are paid a wage premium. Using a two-stage double fixed-effect model, Yang and Lin (2012), however, find evidence of salary discrimination against international players when analyzing the 1999 through 2008 seasons. Then Hoffer and Freidel (2014) using a cross sectional approach find a wage premium for the 2010-2011 season. Using similar techniques with a longer unbalanced panel dataset (1989-2013) that covers all the years of the previous studies we test for the robustness of the results. We suggest that discrimination results are quite sensitive to the specifications and techniques used. We find that many of the results are not robust and that foreign wage premiums exist only for early foreign entrants and neither pay discrimination nor a wage premium exist after the 1996 season. Key Words: Wage Discrimination. NBA, International Labor Market

Suggested Citation

  • James Richard Hill & Peter A. Groothuis, 2016. "Is There a Wage Premium or Wage Discrimination For Foreign-Born Players in the NBA?," Working Papers 16-11, Department of Economics, Appalachian State University.
    • Handle: RePEc:apl:wpaper:16-11
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    File URL: http://econ.appstate.edu/RePEc/pdf/wp1611.pdf
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    References listed on IDEAS

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    1. Akira Motomura, 2016. "MoneyRoundball? The Drafting of International Players by National Basketball Association Teams," Journal of Sports Economics, , vol. 17(2), pages 175-206, February.
    2. Olof Åslund & Lena Hensvik & Oskar Nordström Skans, 2014. "Seeking Similarity: How Immigrants and Natives Manage in the Labor Market," Journal of Labor Economics, University of Chicago Press, vol. 32(3), pages 405-441.
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    5. Erick Eschker & Stephen Perez & Mark Siegler, 2004. "The NBA and the influx of international basketball players," Applied Economics, Taylor & Francis Journals, vol. 36(10), pages 1009-1020.
    6. Ann P. Bartel & Nachum Sicherman, 1999. "Technological Change and Wages: An Interindustry Analysis," Journal of Political Economy, University of Chicago Press, vol. 107(2), pages 285-325, April.
    7. Chih-Hai Yang & Hsuan-Yu Lin, 2012. "Is There Salary Discrimination by Nationality in the NBA?," Journal of Sports Economics, , vol. 13(1), pages 53-75, February.
    8. Peter Groothuis & James Richard Hill & Timothy Perri, 2009. "The dilemma of choosing talent: Michael Jordans are hard to find," Applied Economics, Taylor & Francis Journals, vol. 41(25), pages 3193-3198.
    9. George J. Borjas & Bernt Bratsberg, 2021. "Who Leaves? The Outmigration Of The Foreign-Born," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 5, pages 93-104, World Scientific Publishing Co. Pte. Ltd..
    10. Peter A. Groothuis & James Richard Hill, 2013. "Pay Discrimination, Exit Discrimination or Both? Another Look at an Old Issue Using NBA Data," Journal of Sports Economics, , vol. 14(2), pages 171-185, April.
    11. Adam J. Hoffer & Ryan Freidel, 2014. "Does salary discrimination persist for foreign athletes in the NBA?," Applied Economics Letters, Taylor & Francis Journals, vol. 21(1), pages 1-5, January.
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    1. Shao, Wen-Chao & Zhang, Han & Chou, Li-Chen & Ye, Xi-Xi, 2023. "Comparing athletes’ mastery of salary information before and during the COVID-19 pandemic: Evidence from the national basketball association," Economic Modelling, Elsevier, vol. 128(C).

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    Keywords

    wage discrimination. nba; international labor market;

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