Within the past generation, professional sports have become a well-known new route to the top of the income distribution. Average salaries in major league baseball had reached $850,000 by 1991, about 12 times the $70,000 average (in 1991 dollars) that prevailed in the mid-1950s. This chapter addresses the obvious question, posed in its title, primarily through an analysis of the labor market for baseball players, with occasional comparisons to other sports. It focuses on the implications of the introduction of free agency in baseball in 1976, documenting the subsequent increase in financial rewards for small increments in performance, and finding that overall inequality among baseball players has risen sharply in the free agency era.
