Free agency and pay discrimination in major league baseball

Over the last three decades, Major League Baseball has often served as a natural setting for the study of discrimination in the workforce. Much of this research has found that salary discrimination has all but disappeared in Major League Baseball. However, an issue that remains unresolved is whether salary discrimination can be found among players who are not eligible for free agency. The important theoretical question raised here is whether market constraints on competition for labor encourage wage discrimination. The purpose of this study was to examine this issue by using recent data. Our results suggest that race is not a significant predictor of compensation, even among players who are not eligible for free agency. Two interpretations of these findings are presented, as well as implications for social policy.