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Would reducing tenure probabilities increase faculty salaries?

Author: Ronald G Ehrenberg; Paul J Pieper; Rachel A Willis; National Bureau of Economic Research.
Publisher: Cambridge, MA : National Bureau of Economic Research, ©1995.
Series: Working paper series (National Bureau of Economic Research), working paper no. 5150.
Edition/Format:   eBook : Document : EnglishView all editions and formats
Summary:
Abstract: The simplest competitive labor market model asserts that if tenure is a desirable job characteristic for professors, they should be willing to pay for it by accepting lower salaries. Conversely, if an institution unilaterally reduces the probability that its assistant professors receive tenure, it will have to pay higher salaries to attract new faculty. Our paper tests this theory using data on salary  Read more...
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Material Type: Document, Internet resource
Document Type: Internet Resource, Computer File
All Authors / Contributors: Ronald G Ehrenberg; Paul J Pieper; Rachel A Willis; National Bureau of Economic Research.
OCLC Number: 51309504
Notes: "June 1995."
Description: 1 online resource (24, [6] pages).
Series Title: Working paper series (National Bureau of Economic Research), working paper no. 5150.
Responsibility: Ronald G. Ehrenberg, Paul J. Pieper, Rachel A. Willis.

Abstract:

Abstract: The simplest competitive labor market model asserts that if tenure is a desirable job characteristic for professors, they should be willing to pay for it by accepting lower salaries. Conversely, if an institution unilaterally reduces the probability that its assistant professors receive tenure, it will have to pay higher salaries to attract new faculty. Our paper tests this theory using data on salary offers accepted by new assistant professors at economics departments in the United States during the 1974-75 to 1980-81 period, along with data on the proportion of new Ph. Ds hired by each department between 1970 and 1980 that ultimately received tenure in the department or at a comparable or higher quality department. We find evidence that a tradeoff did exist. Equally important, departments that offer low tenure probabilities to assistant professors also paid higher salaries to their tenured faculty. We attribute this to their need to pay higher salaries to attract tenured faculty from the external market.

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