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Seniority, external labor markets, and faculty pay

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  • Brown, Byron W.
  • Woodbury, Stephen A.

Abstract

We estimate the returns to seniority (the wage-tenure profile) for university faculty, and the degree to which these returns respond to entry-level salaries (or opportunity wages) a relationship unexplored in work to date. Using data on faculty at a Big Ten university (ours), we estimate elasticities of senior-faculty salaries with respect to entry-level salaries, and find that these elasticities decline with seniority. The evidence both provides an explanation of faculty salary compression and suggests the importance of controlling for entry-level salaries in obtaining estimates of the returns to seniority.

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File URL: http://www.sciencedirect.com/science/article/B6W5X-3YCDK5C-1/2/83b72ee7243606688952dc9028dc7bf5
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Bibliographic Info

Article provided by Elsevier in its journal The Quarterly Review of Economics and Finance.

Volume (Year): 38 (1998)
Issue (Month): 4 ()
Pages: 771-798

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Handle: RePEc:eee:quaeco:v:38:y:1998:i:4:p:771-798

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Web page: http://www.elsevier.com/locate/inca/620167

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  1. Katharine G. Abraham & Henry S. Farber, 1986. "Job Duration, Seniority, and Earnings," NBER Working Papers 1819, National Bureau of Economic Research, Inc.
  2. Debra A. Barbezat, 1989. "The effect of collective bargaining on salaries in higher education," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 42(3), pages 443-455, April.
  3. Topel, Robert H, 1991. "Specific Capital, Mobility, and Wages: Wages Rise with Job Seniority," Journal of Political Economy, University of Chicago Press, vol. 99(1), pages 145-76, February.
  4. Kevin Hallock, 1994. "Seniority and Monopsony in the Academic Labor Market: Comment," Working Papers 715, Princeton University, Department of Economics, Industrial Relations Section..
  5. Hutchens, Robert M, 1989. "Seniority, Wages and Productivity: A Turbulent Decade," Journal of Economic Perspectives, American Economic Association, vol. 3(4), pages 49-64, Fall.
  6. Louis S. Jacobson & Robert J. LaLonde & Daniel G. Sullivan, 1992. "Earnings losses of displaced workers," Working Paper Series, Macroeconomic Issues 92-28, Federal Reserve Bank of Chicago.
  7. Lazear, Edward P, 1981. "Agency, Earnings Profiles, Productivity, and Hours Restrictions," American Economic Review, American Economic Association, vol. 71(4), pages 606-20, September.
  8. Jovanovic, Boyan, 1979. "Job Matching and the Theory of Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 972-90, October.
  9. Louis S. Jacobson & Robert J. LaLonde & Daniel G. Sullivan, 1993. "Long-term earnings losses of high-seniority displaced workers," Economic Perspectives, Federal Reserve Bank of Chicago, issue Nov, pages 2-20.
  10. Katharine G. Abraham & Henry S. Farber, 1987. "Returns to Seniority in Union and Nonunion Jobs: A New Look at the Evidence," NBER Working Papers 2368, National Bureau of Economic Research, Inc.
  11. Ransom, Michael R, 1993. "Seniority and Monopsony in the Academic Labor Market," American Economic Review, American Economic Association, vol. 83(1), pages 221-33, March.
  12. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
  13. Daniel S. Hamermesh, 1987. "Why Do Fixed-Effects Models Perform So Poorly? The Case of Academic Salaries," NBER Working Papers 2135, National Bureau of Economic Research, Inc.
  14. Brown, James N, 1989. "Why Do Wages Increase with Tenure? On-the-Job Training and Life-Cycle Wage Growth Observed within Firms," American Economic Review, American Economic Association, vol. 79(5), pages 971-91, December.
  15. Hutchens, Robert M, 1987. "A Test of Lazear's Theory of Delayed Payment Contracts," Journal of Labor Economics, University of Chicago Press, vol. 5(4), pages S153-70, October.
  16. Joseph G. Altonji & Robert A. Shakotko, 1985. "Do Wages Rise With Job Seniority?," NBER Working Papers 1616, National Bureau of Economic Research, Inc.
  17. Walter Y. Oi, 1962. "Labor as a Quasi-Fixed Factor," Journal of Political Economy, University of Chicago Press, vol. 70, pages 538.
  18. Johnson, George E & Stafford, Frank P, 1974. "Lifetime Earnings in a Professional Labor Market: Academic Economists," Journal of Political Economy, University of Chicago Press, vol. 82(3), pages 549-69, May/June.
  19. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1.
  20. Hashimoto, Masanori, 1981. "Firm-Specific Human Capital as a Shared Investment," American Economic Review, American Economic Association, vol. 71(3), pages 475-82, June.
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Citations

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Cited by:
  1. Wendy A. Stock & John J. Siegfried, 2006. "Where are they Now? Tracking the Ph.D. Class of 1997," Vanderbilt University Department of Economics Working Papers 0605, Vanderbilt University Department of Economics.
  2. Euwals, Rob & Ward-Warmedinger, Melanie E., 2000. "The Remuneration of British Academics," IZA Discussion Papers 178, Institute for the Study of Labor (IZA).
  3. Rob Euwals & Melanie Ward, . "The Remuneration of British Academics," Discussion Papers in Public Sector Economics 00/7, Department of Economics, University of Leicester.
  4. Felice Martinello, 2009. "Faculty Salaries in Ontario: Compression, Inversion, and the Effects of Alternative Forms of Representation," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 63(1), pages 128, October.
  5. Ward-Warmedinger, Melanie E., 1999. "Salary and the Gender Salary Gap in the Academic Profession," IZA Discussion Papers 64, Institute for the Study of Labor (IZA).
  6. Sun, Minghe, 2002. "A multiple objective programming approach for determining faculty salary equity adjustments," European Journal of Operational Research, Elsevier, vol. 138(2), pages 302-319, April.
  7. Toumanoff, Peter, 2005. "The effects of gender on salary-at-hire in the academic labor market," Economics of Education Review, Elsevier, vol. 24(2), pages 179-188, April.
  8. Nelson, Paul A. & Monson, Terry, 2006. "Research Funding, Experience, and Seniority in Academia," Review of Applied Economics, Review of Applied Economics, vol. 2(1).
  9. Rob Euwals & Melanie Ward, 2005. "What matters most: teaching or research? Empirical evidence on the remuneration of British academics," Applied Economics, Taylor & Francis Journals, vol. 37(14), pages 1655-1672.
  10. Euwals, Rob & Ward-Warmedinger, Melanie, 2000. "What Matters Most: Teaching or Research? Empirical Evidence on the Remuneration of British Academics," CEPR Discussion Papers 2628, C.E.P.R. Discussion Papers.

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