Labour protection and wage gap within occupations: evidence from Buster Posey Rule

This study investigates the unintended distributional effects of labour protection using Major League Baseball’s Buster Posey Rule, which prohibited home plate collisions to enhance player safety. Exploiting this rule as a quasi-natural experiment, I find that the pay gap between regular and backup catchers widened after its adoption. The mechanism operates through a loss of option value for backups, whose wage premium diminished once injuries to starters became less likely. The results highlight how labour protection, while improving workplace safety, can inadvertently alter wage structures and reallocate wage distribution within occupations.