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A Bayesian look at American academic wages: From wage dispersion to wage compression

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  • Majda Benzidia

    (Aix-Marseille University, CNRS, EHESS, Centrale Marseille, AMSE)

  • Michel Lubrano

    (Aix-Marseille University, CNRS, EHESS, Centrale Marseille, AMSE
    Jiangxi University of Finance and Economics)

Abstract

OECD countries have experienced a large increase in top wage inequality. Atkinson (2008) attributes this phenomena to the superstar theory leading to a Pareto tail in the wage distribution with a low Pareto coefficient. Do we observe a similar phenomena for academic wages? We examine wage formation in a public US university using for each academic rank a hybrid mixture formed by a lognormal distribution for regular wages and a Pareto distribution for top wages, using a Bayesian approach. The presence of superstars wages would imply a higher dispersion in the Pareto tail than in the lognormal body. We concluded that academic wages are formed in a different way than other top wages. There is an effort to propose competitive wages to some young Assistant Professors. But when climbing up the wage ladder, we found a phenomenon of wage compression which is just the contrary of a superstar phenomenon.

Suggested Citation

  • Majda Benzidia & Michel Lubrano, 2020. "A Bayesian look at American academic wages: From wage dispersion to wage compression," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 18(2), pages 213-238, June.
    • Handle: RePEc:spr:joecin:v:18:y:2020:i:2:d:10.1007_s10888-019-09431-9
    DOI: 10.1007/s10888-019-09431-9
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    Cited by:

    1. Edwin Fourrier-Nicolai & Michel Lubrano, 2022. "Bayesian inference for non-anonymous Growth Incidence Curves using Bernstein polynomials: an application to academic wage dynamics," Working Papers hal-03880243, HAL.

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