IDEAS home Printed from https://ideas.repec.org/a/eee/quaeco/v38y1998i4p771-798.html
   My bibliography  Save this article

Seniority, external labor markets, and faculty pay

Author

Listed:
  • Brown, Byron W.
  • Woodbury, Stephen A.

Abstract

We estimate the returns to seniority (the wage-tenure profile) for university faculty, and the degree to which these returns respond to entry-level salaries (or opportunity wages) a relationship unexplored in work to date. Using data on faculty at a Big Ten university (ours), we estimate elasticities of senior-faculty salaries with respect to entry-level salaries, and find that these elasticities decline with seniority. The evidence both provides an explanation of faculty salary compression and suggests the importance of controlling for entry-level salaries in obtaining estimates of the returns to seniority.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Brown, Byron W. & Woodbury, Stephen A., 1998. "Seniority, external labor markets, and faculty pay," The Quarterly Review of Economics and Finance, Elsevier, vol. 38(4), pages 771-798.
    • Handle: RePEc:eee:quaeco:v:38:y:1998:i:4:p:771-798
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1062-9769(99)80132-X
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Lazear, Edward P, 1981. "Agency, Earnings Profiles, Productivity, and Hours Restrictions," American Economic Review, American Economic Association, vol. 71(4), pages 606-620, September.
    2. Jacobson, Louis S & LaLonde, Robert J & Sullivan, Daniel G, 1993. "Earnings Losses of Displaced Workers," American Economic Review, American Economic Association, vol. 83(4), pages 685-709, September.
    3. Louis S. Jacobson & Robert J. LaLonde & Daniel G. Sullivan, 1993. "Long-term earnings losses of high-seniority displaced workers," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 17(Nov), pages 2-20.
    4. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4, National Bureau of Economic Research, Inc.
    5. Katharine G. Abraham & Henry S. Farber, 1988. "Returns to Seniority in Union and Nonunion Jobs: A New Look at the Evidence," ILR Review, Cornell University, ILR School, vol. 42(1), pages 3-19, October.
    6. Brown, James N, 1989. "Why Do Wages Increase with Tenure? On-the-Job Training and Life-Cycle Wage Growth Observed within Firms," American Economic Review, American Economic Association, vol. 79(5), pages 971-991, December.
    7. Joseph G. Altonji & Robert A. Shakotko, 1987. "Do Wages Rise with Job Seniority?," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 54(3), pages 437-459.
    8. Hallock, Kevin F, 1995. "Seniority and Monopsony in the Academic Labor Market: Comment," American Economic Review, American Economic Association, vol. 85(3), pages 654-657, June.
    9. Ransom, Michael R, 1993. "Seniority and Monopsony in the Academic Labor Market," American Economic Review, American Economic Association, vol. 83(1), pages 221-233, March.
    10. Gary S. Becker, 1994. "Investment in Human Capital: Effects on Earnings," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition, pages 29-58, National Bureau of Economic Research, Inc.
    11. Johnson, George E & Stafford, Frank P, 1974. "Lifetime Earnings in a Professional Labor Market: Academic Economists," Journal of Political Economy, University of Chicago Press, vol. 82(3), pages 549-569, May/June.
    12. Hashimoto, Masanori, 1981. "Firm-Specific Human Capital as a Shared Investment," American Economic Review, American Economic Association, vol. 71(3), pages 475-482, June.
    13. Debra A. Barbezat, 1989. "The Effect of Collective Bargaining on Salaries in Higher Education," ILR Review, Cornell University, ILR School, vol. 42(3), pages 443-455, April.
    14. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1.
    15. Gary S. Becker, 1994. "Investment in Human Capital: Rates of Return," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition, pages 59-160, National Bureau of Economic Research, Inc.
    16. Gary S. Becker, 1994. "Age, Earnings, Wealth, and Human Capital," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition, pages 228-244, National Bureau of Economic Research, Inc.
    17. Jovanovic, Boyan, 1979. "Job Matching and the Theory of Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 972-990, October.
    18. Hutchens, Robert M, 1987. "A Test of Lazear's Theory of Delayed Payment Contracts," Journal of Labor Economics, University of Chicago Press, vol. 5(4), pages 153-170, October.
    19. Topel, Robert H, 1991. "Specific Capital, Mobility, and Wages: Wages Rise with Job Seniority," Journal of Political Economy, University of Chicago Press, vol. 99(1), pages 145-176, February.
    20. Daniel S. Hamermesh, 1987. "Why Do Fixed-Effects Models Perform So Poorly? The Case of Academic Salaries," NBER Working Papers 2135, National Bureau of Economic Research, Inc.
    21. Abraham, Katharine G & Farber, Henry S, 1987. "Job Duration, Seniority, and Earnings," American Economic Review, American Economic Association, vol. 77(3), pages 278-297, June.
    22. Jacob A. Mincer, 1974. "Schooling and Earnings," NBER Chapters, in: Schooling, Experience, and Earnings, pages 41-63, National Bureau of Economic Research, Inc.
    23. Sherwin Rosen, 1992. "Distinguished Fellow: Mincering Labor Economics," Journal of Economic Perspectives, American Economic Association, vol. 6(2), pages 157-170, Spring.
    24. Hutchens, Robert M, 1989. "Seniority, Wages and Productivity: A Turbulent Decade," Journal of Economic Perspectives, American Economic Association, vol. 3(4), pages 49-64, Fall.
    25. Walter Y. Oi, 1962. "Labor as a Quasi-Fixed Factor," Journal of Political Economy, University of Chicago Press, vol. 70(6), pages 538-538.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ward-Warmedinger, Melanie E., 1999. "Salary and the Gender Salary Gap in the Academic Profession," IZA Discussion Papers 64, Institute of Labor Economics (IZA).
    2. Wendy A. Stock & John J. Siegfried, 2006. "Where Are They Now? Tracking the Ph.D. Class of 1997," Southern Economic Journal, John Wiley & Sons, vol. 73(2), pages 472-488, October.
    3. Bernt Bratsberg & James F. Ragan & John T. Warren, 2010. "Does Raiding Explain The Negative Returns To Faculty Seniority?," Economic Inquiry, Western Economic Association International, vol. 48(3), pages 704-721, July.
    4. Ragan Jr, James F. & Warren, John T. & Bratsberg, Bernt, 1999. "How similar are pay structures in 'similar' departments of economics?," Economics of Education Review, Elsevier, vol. 18(3), pages 347-360, June.
    5. Nelson, Paul A. & Monson, Terry, 2006. "Research Funding, Experience, and Seniority in Academia," Review of Applied Economics, Lincoln University, Department of Financial and Business Systems, vol. 2(1), pages 1-10.
    6. Debra A. Barbezat & James W. Hughes, 2001. "The Effect Of Job Mobility On Academic Salaries," Contemporary Economic Policy, Western Economic Association International, vol. 19(4), pages 409-423, October.
    7. Rob Euwals & Melanie Ward, "undated". "The Remuneration of British Academics," Discussion Papers in Public Sector Economics 00/7, Division of Economics, School of Business, University of Leicester.
    8. Rob Euwals & Melanie Ward, 2005. "What matters most: teaching or research? Empirical evidence on the remuneration of British academics," Applied Economics, Taylor & Francis Journals, vol. 37(14), pages 1655-1672.
    9. Toumanoff, Peter, 2005. "The effects of gender on salary-at-hire in the academic labor market," Economics of Education Review, Elsevier, vol. 24(2), pages 179-188, April.
    10. McDonald, James B. & Sorensen, Jeff, 2017. "Academic salary compression across disciplines and over time," Economics of Education Review, Elsevier, vol. 59(C), pages 87-104.
    11. Ward-Warmedinger, Melanie & Euwals, Rob, 2000. "What Matters Most: Teaching or Research? Empirical Evidence on the Remuneration of British Academics," CEPR Discussion Papers 2628, C.E.P.R. Discussion Papers.
    12. Euwals, Rob & Ward-Warmedinger, Melanie E., 2000. "The Remuneration of British Academics," IZA Discussion Papers 178, Institute of Labor Economics (IZA).
    13. Sun, Minghe, 2002. "A multiple objective programming approach for determining faculty salary equity adjustments," European Journal of Operational Research, Elsevier, vol. 138(2), pages 302-319, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:eee:labchp:v:3:y:1999:i:pb:p:2439-2483 is not listed on IDEAS
    2. Alberto Bayo-Moriones & Jose E. Galdon-Sanchez & Maia Güell, 2010. "Is seniority-based pay used as a motivational device? Evidence from plant-level data," Research in Labor Economics, in: Jobs, Training, and Worker Well-being, pages 155-187, Emerald Group Publishing Limited.
    3. repec:eee:labchp:v:3:y:1999:i:pb:p:2373-2437 is not listed on IDEAS
    4. repec:eee:labchp:v:3:y:1999:i:pb:p:2291-2372 is not listed on IDEAS
    5. Joseph G. Altonji & Nicolas Williams, 1992. "The Effects of Labor Market Experience, Job Seniority, and Job Mobility on Wage Growth," NBER Working Papers 4133, National Bureau of Economic Research, Inc.
    6. Alberto Bayo-Moriones, 2001. "Seniority-based pay: is it used as a motivation device?," Working Papers 0103, Departament Empresa, Universitat Autònoma de Barcelona, revised May 2001.
    7. William J. Moore & Robert J. Newman & Geoffrey K. Turnbull, 2002. "The Experience-Earnings Profile: Productivity-Augmenting or Purely Contractual?," Departmental Working Papers 2002-13, Department of Economics, Louisiana State University.
    8. Dohmen, Thomas J., 2004. "Performance, seniority, and wages: formal salary systems and individual earnings profiles," Labour Economics, Elsevier, vol. 11(6), pages 741-763, December.
    9. Peter F. Orazem & Marvin L. Bouillon & Benjamin M. Doran, 2004. "Long‐Term Attachments and Long‐Run Firm Rates of Return," Southern Economic Journal, John Wiley & Sons, vol. 71(2), pages 314-333, October.
    10. Dan A. Black & Lars Skipper & Jeffrey A. Smith & Jeffrey Andrew Smith, 2023. "Firm Training," CESifo Working Paper Series 10268, CESifo.
    11. Roland A. Amann & Tobias J. Klein, 2012. "Returns to type or tenure?," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 175(1), pages 153-166, January.
    12. Polachek, Solomon W., 2008. "Earnings Over the Life Cycle: The Mincer Earnings Function and Its Applications," Foundations and Trends(R) in Microeconomics, now publishers, vol. 4(3), pages 165-272, April.
    13. repec:eee:labchp:v:1:y:1986:i:c:p:603-640 is not listed on IDEAS
    14. Pratap, Sangeeta & Quintin, Erwan, 2011. "Financial crises and labor market turbulence," Journal of Monetary Economics, Elsevier, vol. 58(6), pages 601-615.
    15. Pfeifer, Christian, 2009. "An Intra-Firm Perspective on Wage Profiles and Employment of Older Workers with Special Reference to Human Capital and Deferred Compensation," Hannover Economic Papers (HEP) dp-413, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    16. Christian Pfeifer, 2009. "Adjustment of Deferred Compensation Schemes, Fairness Concerns, and Hiring of Older Workers," Working Paper Series in Economics 151, University of Lüneburg, Institute of Economics.
    17. Parent, Daniel, 1996. "Survol des contributions théoriques et empiriques liées au capital humain," L'Actualité Economique, Société Canadienne de Science Economique, vol. 72(3), pages 315-356, septembre.
    18. Flabbi, Luca & Ichino, Andrea, 2001. "Productivity, seniority and wages: new evidence from personnel data," Labour Economics, Elsevier, vol. 8(3), pages 359-387, June.
    19. Parent, Daniel, 2002. "Matching, human capital, and the covariance structure of earnings," Labour Economics, Elsevier, vol. 9(3), pages 375-404, July.
    20. Bayer, Christian & Kuhn, Moritz, 2018. "Which Ladder to Climb? Decomposing Life Cycle Wage Dynamics," CEPR Discussion Papers 13158, C.E.P.R. Discussion Papers.
    21. Véronique Simonnet, 1996. "Mobilité professionnelle et salaire : des différences entre hommes et femmes," Économie et Statistique, Programme National Persée, vol. 299(1), pages 59-71.
    22. Carl Sanders & Christopher Taber, 2012. "Life-Cycle Wage Growth and Heterogeneous Human Capital," Annual Review of Economics, Annual Reviews, vol. 4(1), pages 399-425, July.
    23. Vilhuber, Lars, 2001. "La spécificité de la formation en milieu de travail : un survol des contributions théoriques et empiriques récentes," L'Actualité Economique, Société Canadienne de Science Economique, vol. 77(1), pages 133-167, mars.
    24. Manning, Alan, 2000. "Movin' on up: Interpreting the Earnings-Experience Profile," Bulletin of Economic Research, Wiley Blackwell, vol. 52(4), pages 261-295, October.

    More about this item

    JEL classification:

    • J0 - Labor and Demographic Economics - - General
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:quaeco:v:38:y:1998:i:4:p:771-798. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620167 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.