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How Much Is That Star in the Window? Professorial Salaries and Research Performance in UK Universities

Listed author(s):
  • Gianni De Fraja
  • Giovanni Facchini
  • John Gathergood

Using individual level data on the salary of all UK university professors, matched to results on the performance of academic departments from the 2014 Research Excellence Framework, we study the relationship between academic salaries and research performance. The UK higher education sector is particularly interesting because professorial salaries are unregulated and the outcome of the official research evaluation is a key financial concern of universities. To frame our analysis, we present a simple model of university pay determination, which shows that pay level and pay inequality in a department are positively related to performance. Our empirical results confirm these theoretical predictions; we also find that the pay-performance relationship is weaker for the more established and better paying universities. Our findings are also consistent with the idea that higher salaries have been used by departments to recruit academics more likely to improve their performance.

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File URL: http://www.nottingham.ac.uk/gep/documents/papers/2016/2016-13R.pdf
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Paper provided by University of Nottingham, GEP in its series Discussion Papers with number 2016-13.

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Date of creation: 2016
Handle: RePEc:not:notgep:16/13
Contact details of provider: Postal:
School of Economics University of Nottingham University Park Nottingham NG7 2RD

Phone: (44) 0115 951 5620
Fax: (0115) 951 4159
Web page: http://www.nottingham.ac.uk/gep/index.aspx

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