Is racial salary discrimination disappearing in the NBA? evidence from data during 1985–2015

What is it about?

Professional sports athletes are useful subjects of wage discrimination research, as their productivity can be measured across many dimensions and information about their annual salaries exists. We investigate the racial salary gap of white and non-white players in the National Basketball Association in the United States from the 1984–85 season to the 2014–2015 season. We are interested whether the so-called “white premium” in salaries paid to white players still exists. If so, could the premium be explained by racial preferences or income gap?

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Why is it important?

Contrary to previous research, we find that white and non-white players with similar characteristics were paid equally in the 1980s¬–1990s, and the white premium developed only in the 2000s—reaching around 20% in the 2010s. The novelty of our study is its 3-decade analysis, a much longer sample period than in previous studies. This enables us to check how particular periods affect estimation of the white premium. Also, our extensive indicators for performance characteristics lower the chance of biased results. We find no explanation for the cause of the rising salary gap, which remains for future research.