Productivity, Discrimination, and Lost Profits During Baseball’s Integration

This article uses data from Major League Baseball’s integration to identify the sources and magnitude of labor market discrimination. Returns to hiring black workers in this industry were high, and the industry’s labor supply was uniquely suited for rapid integration, yet integration evolved slowly. Many explanations for this sluggishness are considered, including both taste-based and statistical discrimination. Ultimately, only owner and collective coworker discrimination can explain baseball’s slow pace of integration. The estimated levels of discrimination are high, showing the median team sacrificed profits of nearly $2.2 million in 1950 dollars (over $19 million 2010 dollars) by delaying integration. ajor League Baseball’s 1947 integration was a pivotal event in America’s movement away from racial segregation. Though some large industries had integrated prior to baseball, these earlier integrations were generally inconspicuous.1 For example, the Ford Motor Company appeared to be well-integrated by the 1920’s, but due to high levels of internal segregation, few inside Ford (and even fewer outside of Detroit