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A Bayesian Look at American Academic Wages: The Case of Michigan State University

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Abstract

The paper investigates academic wage formation, taking as a benchmark the Michigan State University. We model wage distributions using a hybrid mixture formed by a lognormal distribution for regular wages and a Pareto distributions for higher wages, using a Bayesian approach. With this model, we test for the presence of superstars in the Pareto member by comparing inequality in the two members. We found some evidence of superstars when recruiting Assistant Professors. However, a dynamic analysis reveals that they have a higher rate of outing, and, if they stay, a lower rate of wage increase. For full professors, we found a phenomenon of wage compression as if there were a kind of higher bound, which is just the contrary of a superstar phenomenon.

Suggested Citation

  • Majda Benzidia & Michel Lubrano, 2016. "A Bayesian Look at American Academic Wages: The Case of Michigan State University," AMSE Working Papers 1628, Aix-Marseille School of Economics, France.
    • Handle: RePEc:aim:wpaimx:1628
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    More about this item

    Keywords

    wage determination; academic market; superstars; tournaments theory; human capital; Mincer equation; Bayesian inference; hybrid mixtures;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • C46 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Specific Distributions
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

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