Would Reducing Tenure Probabilities Increase Faculty Salaries?
The simplest competitive labor market model asserts that if tenure is a desirable job characteristic for professors, they should be willing to pay for it by accepting lower salaries. Conversely, if an institution unilaterally reduces the probability that its assistant professors receive tenure, it will have to pay higher salaries to attract new faculty. Our paper tests this theory using data on salary offers accepted by new assistant professors at economics departments in the United States during the 1974-75 to 1980-81 period, along with data on the proportion of new Ph.Ds hired by each department between 1970 and 1980 that ultimately received tenure in the department or at a comparable or higher quality department. We find evidence that a tradeoff did exist. Equally important, departments that offer low tenure probabilities to assistant professors also paid higher salaries to their tenured faculty. We attribute this to their need to pay higher salaries to attract tenured faculty from the external market.
|Date of creation:||Jun 1995|
|Date of revision:|
|Publication status:||published as (Published as "Do Economics Departments with Lower Tenure Probabilities Pay Higher Faculty Salaries?") Review of Economics and Statistics, Vol. 80(November 1998): 503-512.|
|Contact details of provider:|| Postal: |
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Daniel S. Hamermesh, 1994. "Aging and Productivity, Rationality and Matching: Evidence from Economists," NBER Working Papers 4906, National Bureau of Economic Research, Inc.
- Ransom, Michael R, 1993. "Seniority and Monopsony in the Academic Labor Market," American Economic Review, American Economic Association, vol. 83(1), pages 221-33, March.
- McPherson, Michael S. & Winston, Gordon C., 1983. "The economics of academic tenure : A relational perspective," Journal of Economic Behavior & Organization, Elsevier, vol. 4(2-3), pages 163-184.
- Lazear, Edward P, 1979. "Why Is There Mandatory Retirement?," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1261-84, December.
- Carmichael, H Lorne, 1988. "Incentives in Academics: Why Is There Tenure?," Journal of Political Economy, University of Chicago Press, vol. 96(3), pages 453-72, June.
- Ehrenberg, Ronald G, 1992. "The Flow of New Doctorates," Journal of Economic Literature, American Economic Association, vol. 30(2), pages 830-75, June.
- Edward P. Lazear & Sherwin Rosen, 1979.
"Rank-Order Tournaments as Optimum Labor Contracts,"
NBER Working Papers
0401, National Bureau of Economic Research, Inc.
- Levin, Sharon G & Stephan, Paula E, 1991. "Research Productivity over the Life Cycle: Evidence for Academic Scientists," American Economic Review, American Economic Association, vol. 81(1), pages 114-32, March.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:5150. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.