American labor markets have a long history of racial discrimination. Human capital theory demonstrates that, on average, workers are paid according to their likely productivity, which is estimated by past experiences in their working lives such as education, previous work experience, and on-the-job training. With MLB, productivity factors that would be included in a human capital theory based equation might include things such as home runs, runs batted in, batting average, years of major league experience, and defensive ability.
Recommended CitationIrwin '04, Will (2004) "Racial Discrimination in Major League Baseball: Can It Exist When Performance is Crystal Clear?," The Park Place Economist: Vol. 12
Available at: http://digitalcommons.iwu.edu/parkplace/vol12/iss1/11