Is There a Wage Premium or Wage Discrimination For Foreign-Born Players in the NBA?

James Richard Hill and Peter Groothuis

No 16-11, Working Papers from Department of Economics, Appalachian State University

Abstract: The influx of international players into the NBA has led researchers to investigate whether either pay discrimination or a pay premium exists for these new entrants. The results have been mixed. An early article, Escher et al. (2004) find evidence that foreign-born NBA players are paid a wage premium. Using a two-stage double fixed-effect model, Yang and Lin (2012), however, find evidence of salary discrimination against international players when analyzing the 1999 through 2008 seasons. Then Hoffer and Freidel (2014) using a cross sectional approach find a wage premium for the 2010-2011 season. Using similar techniques with a longer unbalanced panel dataset (1989-2013) that covers all the years of the previous studies we test for the robustness of the results. We suggest that discrimination results are quite sensitive to the specifications and techniques used. We find that many of the results are not robust and that foreign wage premiums exist only for early foreign entrants and neither pay discrimination nor a wage premium exist after the 1996 season. Key Words: Wage Discrimination. NBA, International Labor Market

Date: 2016
New Economics Papers: this item is included in nep-spo
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