Upjohn Institute Working Paper No. 95-37
Quarterly Review of Economics and Finance 38 (1998): 771-798
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.
EDUCATION; Postsecondary education; LABOR MARKET ISSUES; Wages, health insurance and other benefits
Brown, Byron W., and Stephen A. Woodbury. 1995. "Seniority, External Labor Markets, and Faculty Pay." Upjohn Institute Working Paper No. 95-37. Kalamazoo, MI: W.E. Upjohn Institute for Employment Research. http://dx.doi.org/10.17848/wp95-37