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

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Author Info
Bodvarsson, Örn B. () (St. Cloud State University)
Sessions, John G. () (University of Bath)

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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.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3748.

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Length: 22 pages
Date of creation: Oct 2008
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Handle: RePEc:iza:izadps:dp3748

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Related research
Keywords: wages; discrimination; imperfect substitutability; integration;

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Find related papers by JEL classification:
J7 - Labor and Demographic Economics - - Labor Discrimination

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  1. Diewert, W E, 1971. "An Application of the Shephard Duality Theorem: A Generalized Leontief Production Function," Journal of Political Economy, University of Chicago Press, vol. 79(3), pages 481-507, May-June. [Downloadable!] (restricted)
  2. Grant, James H & Hamermesh, Daniel S, 1981. "Labor Market Competition among Youths, White Women and Others," The Review of Economics and Statistics, MIT Press, vol. 63(3), pages 354-60, August. [Downloadable!] (restricted)
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  3. Kahn, Lawrence M, 1991. "Customer Discrimination and Affirmative Action," Economic Inquiry, Oxford University Press, vol. 29(3), pages 555-71, July.
  4. Grossman, Jean Baldwin, 1982. "The Substitutability of Natives and Immigrants in Production," The Review of Economics and Statistics, MIT Press, vol. 64(4), pages 596-603, November. [Downloadable!] (restricted)
  5. George J. Borjas, 1987. "Immigrants, Minorities, and Labor Market Competition," NBER Working Papers 2028, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  6. George J. Borjas, 1987. "Immigrants, minorities, and labor market competition," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 40(3), pages 382-392, April.
  7. Altonji, Joseph G. & Blank, Rebecca M., 1999. "Race and gender in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 48, pages 3143-3259 Elsevier. [Downloadable!] (restricted)
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  8. Martin Kahanec, 2006. "The Substitutability of Labor of Selected Ethnic Groups in the US Labor Market," IZA Discussion Papers 1945, Institute for the Study of Labor (IZA). [Downloadable!]
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