Pierre Deschamps, José De Sousa, 13 February 2015

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.

CEPR Policy Research