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

  • Bodvarsson, Örn B.

    ()

    (California State University, Sacramento)

  • Sessions, John G.

    ()

    (University of Bath)

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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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
Date of revision:
Publication status: published as 'The Measurement of Pay Discrimination Between Job Assignments' in: Labour Economics, 2011, 18 (3), 297-309
Handle: RePEc:iza:izadps:dp3748
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  1. 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.
  2. George J. Borjas, 1987. "Immigrants, minorities, and labor market competition," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 40(3), pages 382-392, April.
  3. Joseph G. Altonji & Rebecca M. Blank, . "Race and Gender in the Labor Market," IPR working papers 98-18, Institute for Policy Resarch at Northwestern University.
  4. 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.
  5. 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.
  6. Kahanec, Martin, 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).
  7. Kahn, Lawrence M, 1991. "Customer Discrimination and Affirmative Action," Economic Inquiry, Western Economic Association International, vol. 29(3), pages 555-71, July.
  8. Borjas, George J, 1983. "The Substitutability of Black, Hispanic, and White Labor," Economic Inquiry, Western Economic Association International, vol. 21(1), pages 93-106, January.
  9. 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.
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