IDEAS home Printed from https://ideas.repec.org/p/hig/wpaper/47edu2018.html
   My bibliography  Save this paper

The Determinants of Faculty Pay in Russian Universities: Incentive Contracts

Author

Listed:
  • Ilya Prakhov

    (National Research University Higher School of Economics)

  • Victor Rudakov

    (National Research University Higher School of Economics)

Abstract

This paper evaluates the design of current contractual incentive mechanisms in Russian universities depending on the type of higher education institution after recent significant contractual reforms in the national academic sector. We employ the theoretical framework of incentive contracts in order to identify and assess performance measures of university faculty determining the total income received from teaching, research and administrative duties. We estimate returns from academic productivity in Russia to be reflected in the academic salary by an evaluation of empirical models of the determinants of faculty pay depending on their productivity, current academic and administrative position, gender and seniority. We show that for the entire sample, faculty salary is positively associated with publication activity. Teaching is significant only for the entire sample, but not significant for subsamples. Administrative duties (expressed in the position held) are positively related to faculty pay: the largest effect is for rectors and vice-rectors, but for deans and heads of departments or laboratories the effect is also strong. Heads of universities and structural units receive a significant bonus for their administrative position. For research-oriented universities the largest effect in publication activity is for the number of papers in high ranking journals. In universities with no research status we discovered a significant gender gap: the male faculty earn more than their female colleagues. There is a positive linear relationship between salary and seniority for the entire sample and in universities with no special status, which corresponds to human capital theory. Salaries in universities requiring higher entrance exam scores are higher than in less selective higher education institutions. The salary in Moscow universities is higher than in the regional higher education institutions.

Suggested Citation

  • Ilya Prakhov & Victor Rudakov, 2018. "The Determinants of Faculty Pay in Russian Universities: Incentive Contracts," HSE Working papers WP BRP 47/EDU/2018, National Research University Higher School of Economics.
    • Handle: RePEc:hig:wpaper:47edu2018
    as

    Download full text from publisher

    File URL: https://wp.hse.ru/data/2018/09/10/1155131184/47EDU2018.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Michael S. McPherson & Morton Owen Schapiro, 1999. "Tenure Issues in Higher Education," Journal of Economic Perspectives, American Economic Association, vol. 13(1), pages 85-98, Winter.
    2. Konow, James & Earley, Joseph, 2008. "The Hedonistic Paradox: Is homo economicus happier," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 1-33, February.
    3. 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.
    4. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    5. HOLMSTROM, Bengt, 1979. "Moral hazard and observability," LIDAM Reprints CORE 379, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    6. Atkinson, Adele & Burgess, Simon & Croxson, Bronwyn & Gregg, Paul & Propper, Carol & Slater, Helen & Wilson, Deborah, 2009. "Evaluating the impact of performance-related pay for teachers in England," Labour Economics, Elsevier, vol. 16(3), pages 251-261, June.
    7. Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
    8. Kane, Thomas J. & Rockoff, Jonah E. & Staiger, Douglas O., 2008. "What does certification tell us about teacher effectiveness? Evidence from New York City," Economics of Education Review, Elsevier, vol. 27(6), pages 615-631, December.
    9. Edward L. Glaeser & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2004. "Do Institutions Cause Growth?," Journal of Economic Growth, Springer, vol. 9(3), pages 271-303, September.
    10. James L. Bess, 1998. "Contract Systems, Bureaucracies, and Faculty Motivation," The Journal of Higher Education, Taylor & Francis Journals, vol. 69(1), pages 1-22, January.
    11. Martin L. Weitzman, 1980. "Efficient Incentive Contracts," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 94(4), pages 719-730.
    12. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, March.
    13. Baker, George P, 1992. "Incentive Contracts and Performance Measurement," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 598-614, June.
    14. Katz, David A, 1973. "Faculty Salaries, Promotion, and Productivity at a Large University," American Economic Review, American Economic Association, vol. 63(3), pages 469-477, June.
    15. Oguz K. Baskurt, 2011. "Time series analysis of publication counts of a university: what are the implications?," Scientometrics, Springer;Akadémiai Kiadó, vol. 86(3), pages 645-656, March.
    16. James S. Fairweather, 2005. "Beyond the Rhetoric: Trends in the Relative Value of Teaching and Research in Faculty Salaries," The Journal of Higher Education, Taylor & Francis Journals, vol. 76(4), pages 401-422, July.
    17. Marek Kwiek, 2012. "Changing higher education policies: From the deinstitutionalization to the reinstitutionalization of the research mission in Polish universities," Science and Public Policy, Oxford University Press, vol. 39(5), pages 641-654, June.
    18. Avinash Dixit, 2002. "# Incentives and Organizations in the Public Sector: An Interpretative Review," Journal of Human Resources, University of Wisconsin Press, vol. 37(4), pages 696-727.
    19. Demski, Joel S. & Sappington, David, 1984. "Optimal incentive contracts with multiple agents," Journal of Economic Theory, Elsevier, vol. 33(1), pages 152-171, June.
    20. Brian A. Jacob & Lars Lefgren, 2008. "Can Principals Identify Effective Teachers? Evidence on Subjective Performance Evaluation in Education," Journal of Labor Economics, University of Chicago Press, vol. 26(1), pages 101-136.
    21. Arnold P. Kaminsky, 1980. ""Lombard Street" and India: Currency Problems in the Late Nineteenth Century," The Indian Economic & Social History Review, , vol. 17(3), pages 307-327, July.
    22. Laffont, Jean-Jacques & Tirole, Jean, 1988. "The Dynamics of Incentive Contracts," Econometrica, Econometric Society, vol. 56(5), pages 1153-1175, September.
    23. Jacob A. Mincer, 1974. "Schooling and Earnings," NBER Chapters, in: Schooling, Experience, and Earnings, pages 41-63, National Bureau of Economic Research, Inc.
    24. Bengt Holmstrom, 1979. "Moral Hazard and Observability," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 74-91, Spring.
    25. Michael J. Podgursky & Matthew G. Springer, 2007. "Teacher performance pay: A review," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 26(4), pages 909-950.
    26. Moore, William J & Newman, Robert J & Turnbull, Geoffrey K, 1998. "Do Academic Salaries Decline with Seniority?," Journal of Labor Economics, University of Chicago Press, vol. 16(2), pages 352-366, April.
    27. Willam O. Brown, 1997. "University Governance and Academic Tenure: A Property Rights Explanation," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 153(3), pages 441-441, September.
    28. Harris, Milton & Raviv, Artur, 1979. "Optimal incentive contracts with imperfect information," Journal of Economic Theory, Elsevier, vol. 20(2), pages 231-259, April.
    29. Simon Burgess & Marisa Ratto, 2003. "The Role of Incentives in the Public Sector: Issues and Evidence," The Centre for Market and Public Organisation 03/071, The Centre for Market and Public Organisation, University of Bristol, UK.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Maria Kravtsova & Aleksey Oshchepkov, 2019. "Market And Network Corruption," HSE Working papers WP BRP 209/EC/2019, National Research University Higher School of Economics.
    2. Anastasia A. Byvaltseva & Anna A. Panova, 2021. "Ways To Succeed At Different Types Of Universities," HSE Working papers WP BRP 62/EDU/2021, National Research University Higher School of Economics.
    3. Renata Kudaibergenova & Sandugash Uzakbay & Asselya Makanova & Kymbat Ramadinkyzy & Erlan Kistaubayev & Ruslan Dussekeev & Kadyrzhan Smagulov, 2022. "Managing publication change at Al-Farabi Kazakh National University: a case study," Scientometrics, Springer;Akadémiai Kiadó, vol. 127(1), pages 453-479, January.
    4. Victor Rudakov & Ilya Prakhov, 2019. "Gender Wage Inequality In Russian Universities," HSE Working papers WP BRP 208/EC/2019, National Research University Higher School of Economics.
    5. Akan Kadyrbekov & Dmitry Veselov, 2019. "Migration Of Russian Settlers And The Legacy Of Inter-Regional Development In Kazakhstan," HSE Working papers WP BRP 210/EC/2019, National Research University Higher School of Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:eee:labchp:v:3:y:1999:i:pb:p:2373-2437 is not listed on IDEAS
    2. Pedro Ortín‐Ángel & Vicente Salas‐fumás, 1998. "Agency‐Theory and Internal‐Labor‐Market Explanations of Bonus Payments: Empirical Evidence from Spanish Firms," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 7(4), pages 573-613, December.
    3. Carolyn J. Heinrich & Gerald Marschke, 2010. "Incentives and their dynamics in public sector performance management systems," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 29(1), pages 183-208.
    4. Eduard Marinov, 2016. "The 2016 Nobel Prize in Economics," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 6, pages 97-149.
    5. Eguchi, Kyota, 2005. "Job transfer and influence activities," Journal of Economic Behavior & Organization, Elsevier, vol. 56(2), pages 187-197, February.
    6. McCausland, David & Pouliakas, Konstantinos & Theodossiou, Ioannis, 2005. "Some are Punished and Some are Rewarded: A Study of the Impact of Performance Pay on Job Satisfaction," MPRA Paper 14243, University Library of Munich, Germany.
    7. Jed De Varo & Suraj Prasad, 2015. "The Relationship between Delegation and Incentives Across Occupations: Evidence and Theory," Journal of Industrial Economics, Wiley Blackwell, vol. 63(2), pages 279-312, June.
    8. Filippo Belloc, 2014. "Innovation in State-Owned Enterprises: Reconsidering the Conventional Wisdom," Journal of Economic Issues, Taylor & Francis Journals, vol. 48(3), pages 821-848.
    9. Michael Waldman, 2012. "Theory and Evidence in Internal LaborMarkets [The Handbook of Organizational Economics]," Introductory Chapters,, Princeton University Press.
    10. Bruno Deffains & Dominique Demougin, 2006. "Governance: Who Controls Matters," SFB 649 Discussion Papers SFB649DP2006-053, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
    11. Silva, Pedro Luís, 2022. "Specialists or All-Rounders: How Best to Select University Students?," IZA Discussion Papers 15271, Institute of Labor Economics (IZA).
    12. Konstantinos Pouliakas, 2010. "Pay Enough, Don't Pay Too Much or Don't Pay at All? The Impact of Bonus Intensity on Job Satisfaction," Kyklos, Wiley Blackwell, vol. 63(4), pages 597-626, November.
    13. Hooper, Louise, 2008. "Paying for performance: Uncertainty, asymmetric information and the payment model," Research in Transportation Economics, Elsevier, vol. 22(1), pages 157-163, January.
    14. Eric S. Taylor & John H. Tyler, 2011. "The Effect of Evaluation on Performance: Evidence from Longitudinal Student Achievement Data of Mid-career Teachers," NBER Working Papers 16877, National Bureau of Economic Research, Inc.
    15. Daniel Shapiro & Yao Tang & Miaojun Wang & Weiying Zhang, 2017. "Monetary incentives and innovation in Chinese SMEs," Asian Business & Management, Palgrave Macmillan, vol. 16(3), pages 130-157, July.
    16. Alex Edmans & Xavier Gabaix, 2016. "Executive Compensation: A Modern Primer," Journal of Economic Literature, American Economic Association, vol. 54(4), pages 1232-1287, December.
    17. Bartsch, Elga, 1996. "Enforcement of environmental liability in the case of uncertain causality and asymmetric information," Kiel Working Papers 755, Kiel Institute for the World Economy (IfW Kiel).
    18. Robert E. Martin, 2011. "The College Cost Disease," Books, Edward Elgar Publishing, number 14179.
    19. Pouliakas, Konstantinos, 2008. "Pay enough, don’t pay too much or don’t pay at all? An empirical study of the non-monotonic impact of incentives on job satisfaction," MPRA Paper 10031, University Library of Munich, Germany.
    20. Geys, Benny & Heggedal, Tom-Reiel & Sørensen, Rune J., 2017. "Are bureaucrats paid like CEOs? Performance compensation and turnover of top civil servants," Journal of Public Economics, Elsevier, vol. 152(C), pages 47-54.
    21. repec:eee:labchp:v:3:y:1999:i:pb:p:2439-2483 is not listed on IDEAS
    22. repec:eee:labchp:v:3:y:1999:i:pb:p:2485-2563 is not listed on IDEAS
    23. Braz Camargo & Elena Pastorino & Fabian Lange, 2018. "Earnings Dynamics: the Role of Learning, Human Capital, and Performance Incentives," 2018 Meeting Papers 581, Society for Economic Dynamics.

    More about this item

    Keywords

    academic contracts; faculty pay; merit pay; incentive contract; international rankings; competitiveness of higher education.;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hig:wpaper:47edu2018. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Shamil Abdulaev or Shamil Abdulaev (email available below). General contact details of provider: https://edirc.repec.org/data/hsecoru.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.