Graduate School of Economics and Management, Tohoku University

This study examines wage discrimination by birth month, with a focus on the labor market of professional baseball leagues in Japan. The results show that even after controlling for performance, the younger players in a given cohort had lower incomes. This wage discrim- ination is caused by the undervaluation of them at enrollment. More specifically, the biased evaluation of teams in terms of a player’s future success leads to the underpayment of the initial salary, which has a persistent impact on subsequent salaries. These findings suggest that improving the suboptimal hiring process can benefit teams and players.