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Seniority, external labor markets, and faculty pay

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

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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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
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/620167

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  1. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, January.
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  5. Altonji, Joseph G & Shakotko, Robert A, 1987. "Do Wages Rise with Job Seniority?," Review of Economic Studies, Wiley Blackwell, vol. 54(3), pages 437-59, July.
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  16. 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.
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