Swartz: Searching for racial earnings differentials in MLB

From SABR member Matt Swartz at The Hardball Times on August 14, 2014:

African-Americans and Latinos earn significantly less than white people in the United States. Overall, incomes for African-Americans are about 35 percent lower than for white people, and Latinos earn about 39 percent less.

A little more than half this difference can be explained by differences in education, occupation and experience, but outside those factors, there is still a large and persistent gap in earnings by race. Why? The explanation may be something other than willful discrimination or employer bias. There may be unobservable traits related to life experiences that wound the ability of African-Americans and Latinos to earn more money.

Major League Baseball is a fertile ground to study earnings differentials, because it has fantastic measures of earnings productivity. There is nothing close to WAR available to measure productivity of CEOs, doctors, waiters or construction workers.

Opportunity to become equally productive is hard to measure, but we know that there have been fewer African-American players over time, and I have shown in the past that this is primarily due to differences in opportunity. Players from wealthier backgrounds (especially with year-round playing weather) have been able to develop skills earlier and more thoroughly than potential players of modest means, which has led to fewer African-American players. On the other hand, globalization has given Latin American players opportunities that they would not have received decades ago.

Even though there have been differences in opportunities for people of different races to become baseball players, that does not necessarily mean that there is any earnings difference for players of similar productivity. While measuring this is hard in many professions, it is relatively easy to study for baseball players.

Read the full article here: http://www.hardballtimes.com/searching-for-racial-earnings-differentials-in-major-league-baseball/

Originally published: August 14, 2014. Last Updated: August 14, 2014.