IDEAS home Printed from https://ideas.repec.org/a/eee/eecrev/v135y2021ics001429212100091x.html
   My bibliography  Save this article

Labor mobility and racial discrimination

Author

Listed:
  • Deschamps, Pierre
  • De Sousa, José

Abstract

We examine the effect of labor mobility constraints on racial wage discrimination. We show that when monopsony power is low because of relaxed labor mobility constraints, firms cannot act on their prejudice and discrimination disappears. This prediction is taken to the data by using an exogenous mobility shock on the European football labor market. The Bosman ruling lifted restrictions on European player mobility in 1995. Exploiting racial differences in a panel of top English clubs, we compare the pre- and post-Bosman ruling market. We find evidence that wage discrimination disappears only for workers whose mobility constraints have been lifted.

Suggested Citation

  • Deschamps, Pierre & De Sousa, José, 2021. "Labor mobility and racial discrimination," European Economic Review, Elsevier, vol. 135(C).
    • Handle: RePEc:eee:eecrev:v:135:y:2021:i:c:s001429212100091x
    DOI: 10.1016/j.euroecorev.2021.103738
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S001429212100091X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.euroecorev.2021.103738?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Audra J. Bowlus & Zvi Eckstein, 2002. "Discrimination and Skill Differences in an Equilibrium Search Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(4), pages 1309-1345, November.
    2. Manning, Alan, 2003. "The real thin theory: monopsony in modern labour markets," Labour Economics, Elsevier, vol. 10(2), pages 105-131, April.
    3. Ross Levine & Alexey Levkov & Yona Rubinstein, 2008. "Racial Discrimination and Competition," NBER Working Papers 14273, National Bureau of Economic Research, Inc.
    4. Stijn Baert & Bart Cockx & Niels Gheyle & Cora Vandamme, 2015. "Is There Less Discrimination in Occupations Where Recruitment Is Difficult?," ILR Review, Cornell University, ILR School, vol. 68(3), pages 467-500, May.
    5. Ignacio Palacios-Huerta, 2014. "Beautiful Game Theory: How Soccer Can Help Economics," Economics Books, Princeton University Press, edition 1, number 10260.
    6. Kerwin Kofi Charles & Jonathan Guryan, 2011. "Studying Discrimination: Fundamental Challenges and Recent Progress," Annual Review of Economics, Annual Reviews, vol. 3(1), pages 479-511, September.
    7. Dale T. Mortensen, 1988. "Equilibrium Wage Distrihutions: A Synthesis," Discussion Papers 811, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    8. Joseph Price & Justin Wolfers, 2010. "Racial Discrimination Among NBA Referees," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(4), pages 1859-1887.
    9. Rajan, Raghuram G & Zingales, Luigi, 1998. "Financial Dependence and Growth," American Economic Review, American Economic Association, vol. 88(3), pages 559-586, June.
    10. repec:eee:labchp:v:3:y:1999:i:pc:p:3143-3259 is not listed on IDEAS
    11. Stefan Szymanski, 2010. "A Market Test for Discrimination in the English Professional Soccer Leagues," Palgrave Macmillan Books, in: Football Economics and Policy, chapter 6, pages 136-150, Palgrave Macmillan.
    12. Joseph E. Stiglitz, 1974. "Alternative Theories of Wage Determination and Unemployment in LDC's: The Labor Turnover Model," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 88(2), pages 194-227.
    13. Wladimir Andreff, 2014. "Building Blocks for a Disequilibrium Model of a European Team Sports League," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00971782, HAL.
    14. Ian Preston & Stefan Szymanski, 2000. "Racial Discrimination in English football," Scottish Journal of Political Economy, Scottish Economic Society, vol. 47(4), pages 342-363, September.
    15. Bowlus, Audra J & Kiefer, Nicholas M & Neumann, George R, 2001. "Equilibrium Search Models and the Transition from School to Work," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(2), pages 317-343, May.
    16. Emilio Depetris-Chauvin & Ruben Durante & Filipe Campante, 2020. "Building Nations through Shared Experiences: Evidence from African Football," American Economic Review, American Economic Association, vol. 110(5), pages 1572-1602, May.
    17. Wladimir Andreff, 2015. "Governance of Professional Team Sports Clubs: Agency Problem and Soft Budget Constraint," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01305679, HAL.
    18. John Goddard & John O. S. Wilson, 2009. "Racial discrimination in English professional football: evidence from an empirical analysis of players' career progression," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 33(2), pages 295-316, March.
    19. Joshua D. Angrist & Jörn-Steffen Pischke, 2009. "Mostly Harmless Econometrics: An Empiricist's Companion," Economics Books, Princeton University Press, edition 1, number 8769.
    20. Alan B. Krueger & Orley Ashenfelter, 2022. "Theory and Evidence on Employer Collusion in the Franchise Sector," Journal of Human Resources, University of Wisconsin Press, vol. 57(S), pages 324-348.
    21. Jeff Biddle & Daniel Hamermesh, 2013. "Wage discrimination over the business cycle," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-19, December.
    22. Borjas, George J & Bronars, Stephen G, 1989. "Consumer Discrimination and Self-employment," Journal of Political Economy, University of Chicago Press, vol. 97(3), pages 581-605, June.
    23. David Roodman, 2009. "A Note on the Theme of Too Many Instruments," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(1), pages 135-158, February.
    24. Michael Lipsitz & Evan Starr, 2022. "Low-Wage Workers and the Enforceability of Noncompete Agreements," Management Science, INFORMS, vol. 68(1), pages 143-170, January.
    25. John J. Binder & Murray Findlay, 2012. "The Effects of the Bosman Ruling on National and Club Teams in Europe," Journal of Sports Economics, , vol. 13(2), pages 107-129, April.
    26. Black, Dan A, 1995. "Discrimination in an Equilibrium Search Model," Journal of Labor Economics, University of Chicago Press, vol. 13(2), pages 309-333, April.
    27. Marianne Bertrand & Sendhil Mullainathan, 2004. "Are Emily and Greg More Employable Than Lakisha and Jamal? A Field Experiment on Labor Market Discrimination," American Economic Review, American Economic Association, vol. 94(4), pages 991-1013, September.
    28. Henrik Jacobsen Kleven & Camille Landais & Emmanuel Saez, 2013. "Taxation and International Migration of Superstars: Evidence from the European Football Market," American Economic Review, American Economic Association, vol. 103(5), pages 1892-1924, August.
    29. Wladimir Andreff, 2014. "Building Blocks for a Disequilibrium Model of a European Team Sports League," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01243716, HAL.
    30. Wayne K. Talley & James Peoples, 2001. "Black-White Earnings Differentials: Privatization versus Deregulation," American Economic Review, American Economic Association, vol. 91(2), pages 164-168, May.
    31. John Vrooman, 2007. "Theory Of The Beautiful Game: The Unification Of European Football," Scottish Journal of Political Economy, Scottish Economic Society, vol. 54(3), pages 314-354, July.
    32. Stefan Szymanski, 2010. "The Economic Design of Sporting Contests," Palgrave Macmillan Books, in: The Comparative Economics of Sport, chapter 1, pages 1-78, Palgrave Macmillan.
    33. Burdett, Kenneth & Mortensen, Dale T, 1998. "Wage Differentials, Employer Size, and Unemployment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(2), pages 257-273, May.
    34. Romain Gauriot & Lionel Page, 2019. "Fooled by Performance Randomness: Overrewarding Luck," The Review of Economics and Statistics, MIT Press, vol. 101(4), pages 658-666, October.
    35. Kevin Lang & Jee-Yeon K. Lehmann, 2012. "Racial Discrimination in the Labor Market: Theory and Empirics," Journal of Economic Literature, American Economic Association, vol. 50(4), pages 959-1006, December.
    36. Heywood, John S & Peoples, James H, Jr, 1994. "Deregulation and the Prevalence of Black Truck Drivers," Journal of Law and Economics, University of Chicago Press, vol. 37(1), pages 133-155, April.
    37. Wladimir Andreff, 2014. "Building Blocks for a Disequilibrium Model of a European Team Sports League," Post-Print halshs-00971782, HAL.
    38. Pedro Garcia-del-Barrio & Stefan Szymanski, 2009. "Goal! Profit Maximization Versus Win Maximization in Soccer," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 34(1), pages 45-68, February.
    39. Suresh Naidu & Yaw Nyarko & Shing-Yi Wang, 2016. "Monopsony Power in Migrant Labor Markets: Evidence from the United Arab Emirates," Journal of Political Economy, University of Chicago Press, vol. 124(6), pages 1735-1792.
    40. 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.
    41. Steinar Holden & Åsa Rosén, 2014. "Discrimination And Employment Protection," Journal of the European Economic Association, European Economic Association, vol. 12(6), pages 1676-1699, December.
    42. Wladimir Andreff, 2015. "Governance of Professional Team Sports Clubs: Agency Problem and Soft Budget Constraint," Post-Print hal-01305679, HAL.
    43. Suresh Naidu, 2010. "Recruitment Restrictions and Labor Markets: Evidence from the Postbellum U.S. South," Journal of Labor Economics, University of Chicago Press, vol. 28(2), pages 413-445, April.
    44. Thomas (T.L.P.R.) Peeters & Stefan Szymanski & Marko Terviö, 2017. "The inefficient advantage of experience in the market for football managers," Tinbergen Institute Discussion Papers 17-116/VII, Tinbergen Institute.
    45. Evan P. Starr & J.J. Prescott & Norman D. Bishara, 2021. "Noncompete Agreements in the US Labor Force," Journal of Law and Economics, University of Chicago Press, vol. 64(1), pages 53-84.
    46. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    47. Lawrence M. Kahn, 2000. "The Sports Business as a Labor Market Laboratory," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 75-94, Summer.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:spo:wpmain:info:hdl:2441/64devegb4f8l7a342ageb19ehc is not listed on IDEAS
    2. Hoey, Sam & Peeters, Thomas & Principe, Francesco, 2021. "The transfer system in European football: A pro-competitive no-poaching agreement?," International Journal of Industrial Organization, Elsevier, vol. 75(C).
    3. Dalmazzo, Alberto & Leombruni, Roberto & Razzolini, Tiziano, 2023. "Anticipation Effects of EU Accession on Immigrants' Labour Market Outcomes," IZA Discussion Papers 16614, Institute of Labor Economics (IZA).
    4. Principe, Francesco & van Ours, Jan C., 2022. "Racial bias in newspaper ratings of professional football players," European Economic Review, Elsevier, vol. 141(C).
    5. repec:hal:spmain:info:hdl:2441/64devegb4f8l7a342ageb19ehc is not listed on IDEAS

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Deschamps, Pierre & De Sousa, José, 2021. "Labor mobility and racial discrimination," European Economic Review, Elsevier, vol. 135(C).
    2. repec:hal:spmain:info:hdl:2441/6ftmcu468j8a49bft2hrpi6uql is not listed on IDEAS
    3. Zheng Fang & Chris Sakellariou, 2013. "Discrimination in the Equilibrium Search Model with Wage-Tenure Contracts," Annals of Economics and Finance, Society for AEF, vol. 14(2), pages 451-480, November.
    4. David Neumark, 2018. "Experimental Research on Labor Market Discrimination," Journal of Economic Literature, American Economic Association, vol. 56(3), pages 799-866, September.
    5. Siddique, Abu & Vlassopoulos, Michael & Zenou, Yves, 2023. "Market competition and discrimination," European Economic Review, Elsevier, vol. 152(C).
    6. Bar-Eli, Michael & Krumer, Alex & Morgulev, Elia, 2020. "Ask not what economics can do for sports - Ask what sports can do for economics," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 89(C).
    7. Luca Flabbi, 2010. "Gender Discrimination Estimation In A Search Model With Matching And Bargaining," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 51(3), pages 745-783, August.
    8. Principe, Francesco & van Ours, Jan C., 2022. "Racial bias in newspaper ratings of professional football players," European Economic Review, Elsevier, vol. 141(C).
    9. Roland G. Fryer, Jr. & Devah Pager & Jörg L. Spenkuch, 2013. "Racial Disparities in Job Finding and Offered Wages," Journal of Law and Economics, University of Chicago Press, vol. 56(3), pages 633-689.
    10. Barry Reilly, 2014. "Labour market discrimination," Chapters, in: John Goddard & Peter Sloane (ed.), Handbook on the Economics of Professional Football, chapter 15, pages 238-258, Edward Elgar Publishing.
    11. Bond, Timothy N. & Lehmann, Jee-Yeon K., 2018. "Prejudice and racial matches in employment," Labour Economics, Elsevier, vol. 51(C), pages 271-293.
    12. Clémence Berson, 2016. "Local labor markets and taste-based discrimination," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-21, December.
    13. Borowczyk-Martins, Daniel & Bradley, Jake & Tarasonis, Linas, 2018. "Racial discrimination in the U.S. labor market: Employment and wage differentials by skill," Labour Economics, Elsevier, vol. 50(C), pages 45-66.
    14. Steinar Holden & Åsa Rosén, 2014. "Discrimination And Employment Protection," Journal of the European Economic Association, European Economic Association, vol. 12(6), pages 1676-1699, December.
    15. Scelles, Nicolas (Сели, Николя) & Duran, Christophe (Дюра, Кристоф) & Bonnal, Liliane (Бонналь, Лилиан) & Goyeau, Daniel (Гойюс, Даниэль) & Andreff, Wladimir (Андрефф, Владимир), 2016. "Do all sporting prizes have a significant positive impact on attendance in a European national football league? Competitive intensity in the French Ligue 1 [Действительно Ли Все Спортивные Призы Ок," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 3, pages 82-107, June.
    16. Emiko Usui, 2015. "Occupational gender segregation in an equilibrium search model," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-14, December.
    17. William J. Collins & Michael Q. Moody, 2017. "Racial Differences in American Women's Labor Market Outcomes: A Long-Run View," NBER Working Papers 23397, National Bureau of Economic Research, Inc.
    18. Reilly, Barry & Witt, Robert, 2011. "Disciplinary sanctions in English Premiership Football: Is there a racial dimension?," Labour Economics, Elsevier, vol. 18(3), pages 360-370, June.
    19. Mujcic, Redzo & Frijters, Paul, 2013. "Still Not Allowed on the Bus: It Matters If You're Black or White!," IZA Discussion Papers 7300, Institute of Labor Economics (IZA).
    20. Bryson, Alex & Chevalier, Arnaud, 2015. "Is there a taste for racial discrimination amongst employers?," Labour Economics, Elsevier, vol. 34(C), pages 51-63.
    21. Bruno Decreuse & Linas Tarasonis, 2021. "Statistical Discrimination in a Search Equilibrium Model: Racial Wage and Employment Disparities in the US," Annals of Economics and Statistics, GENES, issue 143, pages 105-136.

    More about this item

    Keywords

    Monopsony; Mobility; Discrimination; Football;
    All these keywords.

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eecrev:v:135:y:2021:i:c:s001429212100091x. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eer .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.