Answer to Question #49475 in Macroeconomics for Obinna

Question

A survey finds that European players in the NHL have lower average salaries than North American players. The NHL dismisses this finding as meaningless. Do you agree or disagree? Justify your answer.

Answer 1

The recent influx of European hockey players in the North American professional hockey league raises questions of wage discrimination. For decades the National Hockey League has seen wage discrimination against French Canadians on English Canadian teams, and the European players face a similar labor environment as the French Canadians.
European hockey players now in the NHL have many of the same characteristics that have caused discrimination against French Canadians on teams outside of Quebec. Language problems, alleged deficiency in defensive skills, and the prospect of replacing a "local" player in the starting lineup work against both groups (Lavoie, 2000). The French Canadians additionally have to face the consequences of the political tensions caused by the separatist movement in Quebec. The European players face less political tension because the ending of the Cold War is what allowed the free movement of the Russian and Czech athletes to North America.
The wage regressions show little evidence of salary discrimination against European hockey players in the National Hockey League. A 14-15% pay reduction for European players on English Canadian teams is only significant at a 10% level, but these coefficients lose statistical significance altogether when the sample is divided by position.
So, we can agree with NHL that this finding is meaningless.