Wage discrimination in the NBA: Evidence using free agent signings

Abstract

This article takes a step toward understanding potential causes of wage discrimination in an economy highly dependent on the service industry. Traditionally categorized within the service industry, professional sport leagues such as the National Basketball Association (NBA) provides a unique setting to examine the potential impact of race on salary. We analyze free agency contract signings, which allow us to better capture the determinants of players' wages, from 2011 to 2017 to investigate the prominence of wage discrimination in the NBA. Using weighted linear regression models and the Oaxaca-Blinder decomposition, we find that Black athletes are paid significantly less than their counterparts. In addition, we also identify the presence of consumer discrimination after controlling the exposure of a player to the audience, which is observed through the interaction term between the share of MSA population which is White and an identifier for whether a player is Black.

Putting a price on popularity: Evidence from superstars in the National Basketball Association

“…Kahn (2000) provides a seminal overview examining the key relationship between athlete productivity and pay, how players are allocated across a league, and how league market structures affect player salaries. Specifically, Johnson and Minuci (2020) describes the primary features of the NBA labor market while examining whether a player's race leads to a wage gap, finding that Black players are paid significantly less than other players. The research presented here contributes to this literature by being the first to utilize rich microdata with substantial variation in confounding factors (e.g., competitiveness of opponents, market size, etc.)…”

White men can't jump, but do they still get picked first? Race and player selection in the NBA draft, 1980–2021

“…Through this study, we empirically examine the question: is race associated with where a player gets selected during the NBA Draft? Our analyses demonstrate that, despite evidence that Black players experience discrimination in the NBA, including with respects to salary (e.g., Johnson & Minuci, 2020;Naito & Tukagi, 2017), career longevity (e.g., Hoang & Rascher, 1999;Norris & Moss-Pech, 2022), and media coverage (Kanazawa & Funk, 2001), there is only limited evidence of racial bias with regards to player selection during the draft. These findings are robust to the use of (i) alternative specifications of our focal predictor (race) and outcome (draft pick number) variables, (ii) modeling techniques (e.g., logistic, probit, linear probability), and (iii) sub-sample analyses including controls for subjective evaluations of players performed by scouts.…”

The Importance of Team Fit for NBA Rookies’ Career Earnings

“…There is also a multitude of evidence of wage discrimination in the NBA. Kahn and Sherer (1988), Brown et al (1991), andMinuci (2020), all find that black NBA players are paid significantly less than their white counterparts. Hoang and Rascher (1999) additionally finds that black players are more likely to be cut and have shorter careers compared to white players.…”