Faculty Productivity, Seniority, and Salary Compression

For decades, many senior professors have noticed that the earnings of entry-level faculty are often very close to, or greater than their own. This trend in faculty life-cycle earnings can be illustrated by the 1998 salary and seniority data obtained from a public, liberal arts college (PLAC) that are reported in Table 1. Salary compression is evidenced by the narrow earnings difference ($2,300) between the highest-paid assistant professor and the lowest-paid full professor in this department. Salary inversion can be illustrated by differences in the averages, or in the range of salaries between assistant and associate professors. For example, the average assistant professor in Department X earns approximately $200 more than the average associate professor. Also, the highest paid assistant in this department earns $2,000 more than the highest-paid associate. These data indicate a U-shaped wage-tenure profile. Such a profile suggests that faculty with low levels of seniority can expect their earnings to fall, or invert, relative to the salaries of new hires as their careers unfold at this institution. Similarly, the earnings gap between new hires and faculty with high levels of seniority will compress over time.