Her work, his play? The faculty salary structure at a Research I university

Abstract

This dissertation contributes to three major issues in Labor Economics and Econometrics literature. The first contribution is providing new insights into panel-data techniques, the second is new findings on the relationship of women's and men's productivity and pay, and the third is a picture of the remuneration process for professors involved in research and teaching at a Research I University which is based on the detailed data set created for this study. Developing econometric panel data methodology, time-static information is added to a standard fixed effects model. In a setting where no suitable time-varying instruments for the time-static information can be found, it is necessary to calculate the estimates for those in a "second stage" fixed effects estimate. It will be shown that these second stage estimates are exactly equal to the pooled OLS estimates for the same model specification, but that the standard errors are different, and the second stage estimates are biased and inconsistent. Later, new tests for various components of the individual effects are conducted as well as tests to choose the best panel estimation method. Empirically, this work contributes to research on gender discrimination in pay, and its results affect more than the academic environment. So far, most studies were not able to include direct measures of productivity, and have assumed that the estimated gender gap represents an upper bound or overestimation of the real discrimination in pay. The results of this study show that this assumption is not necessarily correct. Looking specifically at the pay structure for university professors involved in teaching and research in a Research I University, several trends have been established. First, structural pay differences between colleges became very apparent, making a strong point against the usage of university-wide regression analysis. For the colleges of Business and Education, seniority lost much of its explanatory power in predicting salaries when publications were added to the analysis. Teaching awards were not rewarded at all in either college, but professors who did not teach were financially penalized.