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Why Education? Teachers labor market: analysis of salary structure. Seminar 2 Ilya Prakhov Research fellow, Centre for Institutional Studies. Higher School of Economics , Moscow , 201 2 www.hse.ru. To get started… The role of education. Discuss the following issues in small groups:

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Why education teachers labor market analysis of salary structure

Why Education?Teachers labor market: analysis of salary structure

Seminar 2

IlyaPrakhov

Research fellow, Centre for Institutional Studies

Higher School of Economics , Moscow, 2012

www.hse.ru


Why education teachers labor market analysis of salary structure

To get started… The role of education

  • Discuss the following issues in small groups:

  • People are poor because they did not work hard enough in school and dropped out.

  • Countries should invest in education mainly because education affects economic growth rates.

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Higher School of Economics , Moscow, 2012


Why education teachers labor market analysis of salary structure

Why do we need education?

  • Education is a merit good, which brings private benefits (for students) as well as social benefits (for society as a group of individuals).

  • This justifies the existence of social costs concerned with education in addition to private costs.

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Higher School of Economics , Moscow, 2012


Why education teachers labor market analysis of salary structure

Going to university or not?

  • Consumption (short-run reason): utility from education.

  • Investment (long-run reason): investment in human capital. This investment is made in order to get higher return from education: increase in salary compared to less educated people. It is true under assumption that education raises productivity, which, in turn, should be compensated by higher wages.

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Higher School of Economics , Moscow, 2012


Why education teachers labor market analysis of salary structure

Private benefits from education

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Source:Jongbloed, 2004, p.254.

Higher School of Economics , Moscow, 2012


Why education teachers labor market analysis of salary structure

Social benefits from education

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Source:Jongbloed, 2004, p.254.

Higher School of Economics , Moscow, 2012


Why education teachers labor market analysis of salary structure

Costs of education

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Source:Jongbloed, 2004, p.254.

Higher School of Economics , Moscow, 2012


Why education teachers labor market analysis of salary structure

Incentives in academia

  • Non-monetary mechanisms:

  • Respect by colleagues

  • Reputation

  • Utility from academic work (vocation)

  • Monetary mechanisms:

  • Salary

  • Grants

  • External funding

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Higher School of Economics , Moscow, 2012


Why education teachers labor market analysis of salary structure

Types of activity in academia

  • At each moment of time:

  • Research

  • Teaching

  • Administration

  • Long-run period:

  • Experience

  • Seniority

  • Theoretical questions:

  • What types of activities should be compensated and how?

  • Do experience and seniority matter?

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Higher School of Economics , Moscow, 2012


Why education teachers labor market analysis of salary structure

Salary structure: research, teaching, administration

  • Approaches to salary formation:

  • According to productivity

  • According to expected productivity

  • According to results

  • Potential concerns and difficulties:

  • Asymmetric information between professor and/or university management, other universities

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Higher School of Economics , Moscow, 2012


Why education teachers labor market analysis of salary structure

Studying empirical evidence: research questions

  • Static aspect:

  • Which indicators (determinants) are ‘good enough’ and can be used in evaluation of productivity in academia?

  • Is it true that each factor positively affects salary?

  • Dynamic aspect:

  • What is the influence of experience and seniority on salary in academia?

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Higher School of Economics , Moscow, 2012


Why education teachers labor market analysis of salary structure

Indicators (measures) of academic activity

  • Discuss and offer:

  • Indicators of research activity

  • Indicators of teaching activity

  • Indicators of academic activity

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Higher School of Economics , Moscow, 2012


Why education teachers labor market analysis of salary structure

Indicators of research activity

  • Number of books published/edited (Katz, 1973; Siegfried, White, 1973; Tuckman, Hageman, 1976; Gomez-Mejia, Balkin, 1992);

  • Number of published papers (Katz, 1973; Siegfried, White, 1973; Tuckman, Hageman, 1976; Gomez-Mejia, Balkin, 1992; Fairweather, 1993);

  • Number of papers published in high quality journals(Katz, 1973; Siegfried, White, 1973; Gomez-Mejia, Balkin, 1992);

  • Number of monographs (Siegfried, White, 1973);

  • Number of dissertations supervised by professor (Katz, 1973);

  • Citation count (Gomez-Mejia, Balkin, 1992);

  • Time devoted to research (Fairweather, 1993);

  • Number of externally funded projects (Fairweather, 1993).

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Higher School of Economics , Moscow, 2012


Why education teachers labor market analysis of salary structure

Indicators of teaching activity

  • Rating of professor (Katz, 1973);

  • Average score based on students’ recommendations (Siegfired, White, 1973);

  • Students’ and administrators’ opinion about quality of teaching (Gomez-Mejia, Balkin, 1992);

  • Teaching awards (Tuckman, Hageman, 1976);

  • Number of dissertations supervised by professor (Katz, 1973);

  • Time devoted to teaching (Fairweather, 1993);

  • Teaching bachelor students only (Fairweather, 1993);

  • Teaching post-graduate students (Fairweather, 1993).

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Higher School of Economics , Moscow, 2012


Why education teachers labor market analysis of salary structure

Indicators of administrative duties

  • Professor held administrative position in the past (Katz, 1973; Tuckman, Hageman, 1976);

  • Professor currently holds administrative position (Katz, 1973; Tuckman, Hageman, 1976);

  • Time devoted to administrative duties (Katz, 1973).

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Higher School of Economics , Moscow, 2012


Why education teachers labor market analysis of salary structure

Results

  • Katz, 1973. The main predictor of salary - publications. Teaching: students’ evaluation is not significant, but supervising has positive effects. Administrative work has significant, but modest effect on salary.

  • Siegfired, White, 1973. Greatest effect – publications in national or specialized journals. Administrative duties have strong positive effect. Teaching is significant only at 10% interval.

  • Tuckman, Hagemann, 1976. The main factor – number of articles published.Books matter. Teaching is insignificant.Administrative duties have positive effects.

  • Gomez-Mejia, Balkin, 1992. The main determinant of salary – publications in refereed journals of a high quality. Teaching matters only for the most successful researchers.

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Higher School of Economics , Moscow, 2012


Why education teachers labor market analysis of salary structure

Academic salary in dynamics

  • Why higher experience should be compensated by higher salary?

  • Results, which were obtained on academic labor market do not correspond with those, which were obtained on non-academic labor market.

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Higher School of Economics , Moscow, 2012


Why education teachers labor market analysis of salary structure

The model

  • Earnings equation:

    lnw = f(Х), where

    lnw – natural logarithm of salary,

    Х – vector of independent determinants of salary with variables of experience and seniority.

    lnw = a0 + a1 · Experience + a2 · Seniority + aX

    Experience– number of years working,

    Seniority – number of years within this university

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Higher School of Economics , Moscow, 2012


Why education teachers labor market analysis of salary structure

The model: effects of experience and seniority

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Higher School of Economics , Moscow, 2012


Why education teachers labor market analysis of salary structure

Possible explanations

  • Decline in productivity

  • Asymmetric information between professor and administration

  • Moving costs

  • Monopsony on academic market

  • Tenure contracts

  • Professional unions

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Higher School of Economics , Moscow, 2012


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