Academic Salary Compression: Winners and Losers

• Activity Number: 78
• Type: Contributed
• Date/Time: Sunday, July 29, 2012 : 4:00 PM to 5:50 PM
• Sponsor: Business and Economic Statistics Section
• Author(s): James McDonald*+ and Jeff Sorensen
• Companies: Brigham Young University and University of California at Berkeley
• Keywords: Salary compression ; stochastic dominance

Abstract

Academic salary compression: Winners and losers

James B. McDonald Department of Economics Brigham Young University

Jeff Sorensen Department of Economics University of California

Abstract Academic salary compression occurs when professors of one professorial rank earn salaries close to-or even higher than-salaries of more senior faculty members. Salary compression in a given discipline can be present relative to other disciplines or within the same discipline over time. Little empirical research has been done on which academic disciplines experience the most salary compression; this work helps fill that gap. We analyze data on faculty salaries from 1993-2011 to see which disciplines have been most affected. The data come from the Oklahoma State Faculty Salary Survey by discipline for 15 disciplines and four ranks (professor, associate, assistant, and new assistant). We calculate and analyze mean-based compression ratios and also explore first- and second-order stochastic dominance relationships between estimated salary distributions corresponding to fitted Dagum distributions. The results indicate that although academic salary compressi