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The Measurement of Racial Discrimination in Pay between Job Categories: Theory and Test

Author

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  • Bodvarsson, Örn B.

    (Retired)

  • Sessions, John G.

    (Newcastle University)

Abstract

The traditional model of taste discrimination in labor markets presumes perfect substitution, making it unsuitable for the measurement of discrimination across job assignments. We extend the model to explain cross-assignment discrimination and test it on data from Major League Baseball. A competitive firm with a Generalized Leontief production function fills each job assignment with whites and nonwhites in an environment of customer prejudice. According to the model, cross-assignment discrimination depends upon racial productivity differences, the productivity x prejudice interaction, technology, relative labor supply and racial integration. We find strong evidence of ceteris paribus racial salary differences between hitters and pitchers.

Suggested Citation

  • Bodvarsson, Örn B. & Sessions, John G., 2008. "The Measurement of Racial Discrimination in Pay between Job Categories: Theory and Test," IZA Discussion Papers 3748, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp3748
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    References listed on IDEAS

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    1. George J. Borjas, 1987. "Immigrants, Minorities, and Labor Market Competition," ILR Review, Cornell University, ILR School, vol. 40(3), pages 382-392, April.
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    7. Hashimoto, Masanori & Kochin, Levis, 1980. "A Bias in the Statistical Estimation of the Effects of Discrimination," Economic Inquiry, Western Economic Association International, vol. 18(3), pages 478-486, July.
    8. Bodvarsson, Orn B. & Partridge, Mark D., 2001. "A supply and demand model of co-worker, employer and customer discrimination," Labour Economics, Elsevier, vol. 8(3), pages 389-416, June.
    9. Kahanec, Martin, 2006. "The Substitutability of Labor of Selected Ethnic Groups in the US Labor Market," IZA Discussion Papers 1945, Institute of Labor Economics (IZA).
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    Cited by:

    1. repec:eid:wpaper:08/10 is not listed on IDEAS
    2. O B Bodvarsson & John Sessions, 2010. "Nationality Discrimination in the Labor Market: Theory and Test," Department of Economics Working Papers 08/10, University of Bath, Department of Economics.
    3. Bodvarsson, Orn B. & Sessions, John G., 2011. "The measurement of pay discrimination between job assignments," Labour Economics, Elsevier, vol. 18(3), pages 297-309, June.

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    More about this item

    Keywords

    integration; imperfect substitutability; wages; discrimination;
    All these keywords.

    JEL classification:

    • J7 - Labor and Demographic Economics - - Labor Discrimination

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