Can Ranking Nationalities Explain the Salary Discrepancies in Major League Soccer?

Previous work on soccer wages finds that some European leagues place higher than expected values on players from South America. The same case could be argued for Major League Soccer (MLS), which has previously expressed a desire to impress Hispanic markets through player acquisitions. Contrary to previous work, this paper focuses on the rank of a player’s nationality, rather than assuming all players from one continent represent similar backgrounds. Using data available through the MLS, MLS Player’s Union, and FIFA, linear and quantile regression techniques estimate wage premiums for a player’s nationality rank to uncover possible customer or owner discrimination. Players’ countries are ranked within each continent into either “top countries” or “bottom countries,” then compared across different specifications. Wage premiums ranged from 30% to 130% for the majority of top ranking countries within North America, Europe, and Africa, while certain South American countries earned wage discounts depending on their country’s rank.