Negative Returns to Seniority: New Evidence in Academic Markets

Recent research has suggested that the long-observed negative association between seniority and pay among college faculty largely reflects below-average research productivity of senior faculty—a possibility that most earlier studies did not examine. Overlooked in both waves of studies, however, is match quality. Because the higher quality of the faculty/institutional match implied by higher seniority should, all else equal, result in higher salaries, failure to account for match quality inflates the estimated returns to seniority. Indeed, that positive bias, the authors find, is roughly equal in magnitude to the negative bias caused by failure to account for research quantity and quality. When they account for both match quality and faculty research productivity in an analysis of data on economics faculty at five research universities over a 21-year period, the authors estimate that, holding experience and other factors constant, the penalty for twenty years of seniority is 16% of salary.