Academic journal article Economic Inquiry

Entry Level Salaries of Academic Economists: Does Gender or Age Matter?

Academic journal article Economic Inquiry

Entry Level Salaries of Academic Economists: Does Gender or Age Matter?

Article excerpt


Since the mid 1970s earnings differentials in academic labor markets have been extensively investigated with particular attention focused on salary differentials between males and females. The leading studies use similar methodologies but differ in terms of the time period analyzed, data sources and whether a single academic discipline or multiple disciplines are considered. For example, Johnson and Stafford |1974~ investigate several academic professions in 1970. Jusenius and Scheffler |1981~ consider a single discipline (economics) in 1973 and include a cross section of universities and professorial ranks as well as race. Several investigators including Katz |1973~, Hirsch and Leppel |1982~, Rickman |1984~ and Raymond, Sesnowitz and Williams |1988~ focus on a single college or university and include diverse academic disciplines. The latter two studies raise the question of whether gender continued to matter in academic labor markets in the 1980s and reach opposite conclusions.

A consistent finding transcending early studies of academic labor markets is that earnings differentials are smallest between men and women who are at the beginning of their careers. For example, Johnson and Stafford, in a widely cited study, state: "The most important finding is that the salaries of females start out at not much less than those of males (4 to 11 percent in the six disciplines in our sample) and then decline..." |1974, 901~. This paper investigates entry level salaries in a single academic discipline by considering a cross section of newly hired economists. The primary source of labor market information is a unique survey of entry level salaries in the 1987-88 academic year. It might seem that by the late 1980s gender differentials should have disappeared at the entry level, but like Johnson and Stafford's |1974~ earlier result, our survey reveals newly hired females received $1060 (3.4 percent) less than males. Our principal purpose is to determine whether this gender differential and the effects of age are significant once other determinants of earnings are taken into account. For example, we consider and control for terminal degree status, the quality of the Ph.D. granting department, field of specialization, highest degree offered by the hiring department, differences in cost of living across areas, and other institutional factors that can influence beginning entry level salaries.

We first describe the data set developed primarily from a survey, which is used to estimate entry level earnings equations. We also briefly compare our survey to other surveys providing information on market outcomes for economists. We then present estimates of the determinants of entry level salaries and discuss the influence of gender, age and other determinants of earnings.


A total of 469 U.S. economics departments were surveyed in the summer and fall of 1987 with 258 departments responding (55 percent).(1) The 1987-88 academic year salary of each new hire was requested of each department. Demographic information (age, sex) and human capital characteristics (Ph.D. granting university, primary field of specialization and degree status) were also requested for each new hire. In addition, the survey included questions on whether the hiring college/university is privately or publicly supported, the administrative reporting channel of the economics department, highest degree offered and number of entry level persons hired. The identities of the hiring department and the university at which the newly hired economist did his or her graduate work are used to construct two measures of quality. The quality of the department where the Ph.D. work was done is the first measure and the quality of the hiring department is the second.(2)

The survey was designed to provide microdata on individual entry level economists for the purpose of estimating earnings equations. In an effort to maximize responses the questionnaire was intentionally brief; only questions directly relevant to estimating the earnings equation of entry level economists were included. …

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