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

Author

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  • Gianni De Fraja
  • Giovanni Facchini
  • John Gathergood

Abstract

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.

Suggested Citation

  • Gianni De Fraja & Giovanni Facchini & John Gathergood, 2016. "How Much Is That Star in the Window? Professorial Salaries and Research Performance in UK Universities," Discussion Papers 2016-13, University of Nottingham, GEP.
  • Handle: RePEc:not:notgep:16/13
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    References listed on IDEAS

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    Cited by:

    1. Battistin, Erich & Ovidi, Marco, 2017. "Rising Stars," IZA Discussion Papers 11198, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    Higher education competition; research funding; university sector; salary in-equality;

    JEL classification:

    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • L30 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - General

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