Annual EBHS Conference, 39th Annual Economic and Business History Society Conference

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Wages in Crisis: Major League Baseball During the Great Depression
Mike Haupert, James Murray

Last modified: 2014-05-19

Abstract


In a recent study, Haupert and Murray (2012) find evidence of recurring structural changes in the relationship between wages, performance, and experience in Major League Baseball (MLB) during a period characterized by teams with tight monpsony control over their players.  In this companion paper, we look closely at the specific structural change beginning in the height of the Great Depression (1933) and ending after World War II (1947).  We find evidence of restricted demand during this time, and while this led to lower overall salaries, the nature in which players were compensated based on experience and performance changed significantly.  During a time in which teams were struggling with lower attendance and lower profits, teams were relying more on experienced players, but basing pay more heavily on recent performance rather than experience.