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

Author

Listed:
  • Majda Benzidia

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

  • Michel Lubrano

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

Abstract

The paper investigates academic wage formation inside Michigan State University and develops tools in order to detect the presence of possible superstars. 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, particularly well adapted for inference in hybrid mixtures. The presence of superstars is detected by studying the shape of the Pareto tail. Contrary to usual expectations, we did found some evidence of superstars, but only when recruiting Assistant Professors. When climbing up the wage ladder, superstars disappear. For full professors, we found a phenomenon of wage compression as if there were a higher bound, which is just the contrary of a superstar phenomenon. Moreover, a dynamic analysis shows that many recruited superstars did not fulfill the university expectations as either they were not promoted or left for lower ranked universities.

Suggested Citation

  • Majda Benzidia & Michel Lubrano, 2016. "A Bayesian Look at American Academic Wages: The Case of Michigan State University," Working Papers halshs-01358882, HAL.
    • Handle: RePEc:hal:wpaper:halshs-01358882
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01358882v2
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    hybrid mixtures; academic market; wage formation; superstars; tournaments theory; Bayesian inference;
    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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