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Pay Discrimination, Exit Discrimination or Both? Another Look at an Old Issue Using NBA Data

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  • Peter A. Groothuis
  • James Richard Hill

Abstract

Economic literature has identified two potential types of racial discrimination in sports careers: exit discrimination and wage discrimination. The authors test for both types of discrimination in National Basketball Association (NBA) data in two ways. First using a modified Heckman procedure, they control for potential survival bias that may arise from exit discrimination in panel data and could possibly bias the coefficients of wage equations. Not controlling for survival bias could lead to false conclusions concerning the presence of pay discrimination. Using 1990-2008 NBA data, the authors fail to find any evidence of either pay or exit discrimination in the NBA utilizing this new technique. In one specification, however, a negative coefficient on the white dummy is found after controlling for height and being foreign-born suggesting that reverse discrimination is present. Yet, using a subset of the panel data used to examine pay discrimination in the NBA with career earnings the authors find that there is a pay premium paid to White players over their career in the magnitude of 16%–20%, ceteris paribus. Neither of these results, however, is robust and highlights the pitfalls of using the residual method in measuring both pay and exit discrimination.

Suggested Citation

  • 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.
  • Handle: RePEc:sae:jospec:v:14:y:2013:i:2:p:171-185
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    Cited by:

    1. Johnny Ducking & Peter A. Groothuis & James Richard Hill, 2014. "Compensation discrimination in the NFL: an analysis of career earnings," Applied Economics Letters, Taylor & Francis Journals, vol. 21(10), pages 679-682, July.
    2. Hisahiro Naito & Yu Takagi, 2016. "Is Racial Salary Discrimination Disappearing in the NBA? Evidence from Data during 1985-2015," Tsukuba Economics Working Papers 2016-001, Economics, Graduate School of Humanities and Social Sciences, University of Tsukuba.
    3. Scott Tainsky & Brian M. Mills & Jason A. Winfree, 2015. "Further Examination of Potential Discrimination Among MLB Umpires," Journal of Sports Economics, , vol. 16(4), pages 353-374, May.
    4. Johnny Ducking & Peter A. Groothuis & James Richard Hill, 2017. "Compensation Discrimination: an Analysis of Linebackers, Defensive Linemen, and Defensive Backs in the National Football League," The Review of Black Political Economy, Springer;National Economic Association, vol. 44(3), pages 251-260, December.
    5. Hisahiro Naito & Yu Takagi, 2017. "Is Racial Salary Discrimination Disappearing in the NBA? Evidence from Data during 1985--2015," Tsukuba Economics Working Papers 2017-002, Economics, Graduate School of Humanities and Social Sciences, University of Tsukuba.
    6. Hisahiro Naito & Yu Takagi, 2017. "Is there A Positive Association between Increasing Salary Discrimination in the NBA and Unshrinking Racial Income Gap of White and Black Citizens ?," Tsukuba Economics Working Papers 2017-001, Economics, Graduate School of Humanities and Social Sciences, University of Tsukuba.
    7. James Richard Hill & Peter A. Groothuis, 2015. "Are Findings of Salary Discrimination Against Foreign-Born Players in the NBA Robust?," Working Papers 15-13, Department of Economics, Appalachian State University, revised 2015.
    8. Olugbenga Ajilore, 2014. "Do white NBA players suffer from reverse discrimination?," Economics Bulletin, AccessEcon, vol. 34(1), pages 558-566.
    9. 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.
    10. repec:bla:ecinqu:v:55:y:2017:i:2:p:1091-1103 is not listed on IDEAS

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    Keywords

    NBA; exit discrimination; pay discrimination;

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