Any recognition of the magic of markets
out of France is good news, we suppose.
Racial wage discrimination can proliferate in labour markets with large
frictions because workers facing discrimination find it difficult to
relocate. This column presents evidence of the interaction between
frictions and discrimination in the English Premier League, the top tier
of English football, using the 1995 Bosman ruling as an exogenous
shifter. Before the ruling, wage discrimination resulted in teams with
more black players outperforming competitors with equivalent payrolls.
The decrease in frictions associated with the ruling allows players to
escape discrimination by relocating.
Pretty much what
Gary Becker said in his famous paper (and which these two guys, Pierre Deschamps and José de Sousa
, cite). When something is costly less is demanded;
Our results could be important for public policy. If we consider
restrictive contracts to be an important component of the typically
nebulous ‘labour market frictions’, increasing labour mobility and
reducing frictions could lower discrimination. A heartening
interpretation of our results is that the proper labour market
conditions can cause wage differentials between white and black
employees to disappear even if racist attitudes remain.
Just add minimum wage, union wage, and occupational licensure laws, mix and pour.
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