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A Test Of Employer Discrimination In The Nba

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  • ÖRN B. BODVARSSON
  • RAYMOND T. BRASTOW

Abstract

"This paper presents a test of an important implication of Becker's theory of employer discrimination: when institutional change enhances labor mobility, employer discrimination falls because it becomes more costly for employers to indulge tastes for discrimination. The test case is the National Basketball Association (NBA). This paper specifically addresses the following question about the NBA: why did black/white player salary differentials vanish by the early 1990s? Previous studies claim that NBA wage gaps in the 1980s are attributable to customer discrimination and monopsonistic wage discrimination. This study argues that employer discrimination was an important source of those gaps and that one reason they vanished was because reduced monopsony power eradicated employer discrimination. Monopsony power fell because the 1988 NBA Collective Bargaining Agreement and the entry of four new teams in the league enhanced player mobility and increased the amount of labor market competition. Using data for the 1985-86 and 1990-91 seasons, employer discrimination was proxied by the race of the team's general manager. Empirical results strongly suggest that a major reason the NBA wage gap vanished in the later period was because of a reduction in employers' ability to discriminate. This is in contrast to earlier literature on the NBA, which has tended to emphasize the role of customer discrimination." ("JEL" J71) Copyright 1999 Western Economic Association International.

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Bibliographic Info

Article provided by Western Economic Association International in its journal Contemporary Economic Policy.

Volume (Year): 17 (1999)
Issue (Month): 2 (04)
Pages: 243-255

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Handle: RePEc:bla:coecpo:v:17:y:1999:i:2:p:243-255

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Cited by:
  1. Richard C. K. Burdekin & Richard T. Hossfeld & Janet Kiholm Smith, 2005. "Are NBA Fans Becoming Indifferent to Race? Evidence From the 1990s," Journal of Sports Economics, , , vol. 6(2), pages 144-159, May.
  2. Joseph Price & Justin Wolfers, 2010. "Racial Discrimination Among NBA Referees," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 125(4), pages 1859-1887, November.
  3. Christopher Coyne & Justin Isaacs & Jeremy Schwartz, 2010. "Entrepreneurship and the taste for discrimination," Journal of Evolutionary Economics, Springer, Springer, vol. 20(4), pages 609-627, August.
  4. Berri, David J. & Schmidt, Martin B., 2002. "Instrumental versus bounded rationality: a comparison of Major League Baseball and the National Basketball Association," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, Elsevier, vol. 31(3), pages 191-214.
  5. Sherwin Rosen & Allen Sanderson, 2000. "Labor Markets in Professional Sports," NBER Working Papers 7573, National Bureau of Economic Research, Inc.
  6. David Berri & Stacey Brook & Aju Fenn, 2011. "From college to the pros: predicting the NBA amateur player draft," Journal of Productivity Analysis, Springer, Springer, vol. 35(1), pages 25-35, February.
  7. Bodvarsson, Orn B. & Partridge, Mark D., 2001. "A supply and demand model of co-worker, employer and customer discrimination," Labour Economics, Elsevier, Elsevier, vol. 8(3), pages 389-416, June.
  8. Mongeon, Kevin & Winfree, Jason, 2012. "Comparison of television and gate demand in the National Basketball Association," Sport Management Review, Elsevier, Elsevier, vol. 15(1), pages 72-79.
  9. Peter A. Groothuis & Richard Hill, 2007. "Exit Discrimination in Major League Baseball: 1990-2004," Working Papers, Department of Economics, Appalachian State University 07-02, Department of Economics, Appalachian State University.

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