Cross-Assignment Discrimination in Pay: A Test Case of Major League Baseball

33 Pages Posted: 25 Sep 2011

See all articles by Orn B. Bodvarsson

Orn B. Bodvarsson

Saint Cloud State University; IZA Institute of Labor Economics

John G. Sessions

University of Bath; IZA Institute of Labor Economics

Abstract

The traditional Becker/Arrow style model of discrimination depicts majority and minority and workers as perfectly substitutable inputs, implying that all workers have the same job assignment. The model is only appropriate for determining whether pay differences between, for example, whites and non-whites doing job assignment A are attributable to prejudice ('within-assignment discrimination'); It is inappropriate, however, for determining whether pay differences between whites in job assignment A and non-whites in job assignment B reflect discriminatory behaviour ('cross-assignment discrimination'). We test the model of such cross assignment discrimination developed by Bodvarsson and Sessions (2011) using data on Major League Baseball hitters and pitchers for four different seasons during the 1990s, a decade during which monopsony power fell. We find strong evidence of ceteris paribus racial pay differences between hitters and pitchers, as well as evidence that cross-assignment discrimination varies with labour market structure.

Keywords: wage discrimination, complementarity, monopsony power

JEL Classification: J7

Suggested Citation

Bodvarsson, Orn B. and Sessions, John G., Cross-Assignment Discrimination in Pay: A Test Case of Major League Baseball. IZA Discussion Paper No. 5989, Available at SSRN: https://ssrn.com/abstract=1933346

Orn B. Bodvarsson (Contact Author)

Saint Cloud State University ( email )

Saint Cloud, MN 56301
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

John G. Sessions

University of Bath ( email )

Claverton Down
Bath, BA2 7AY
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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