Wednesday, May 30, 2012

Mo' Money

From LeBron's requests, "How do economics professors negotiate their salaries? Do econ professors share notes on this"?

On a year to year basis, there isn't much actual salary negotiation. The Dean will allocate a raise pool to the department along with instructions on how it is to be allocated. For example, there might be a 4% pool, 2% for across the board raises and 2% for merit (in recent years 0% raise pools have been common). Then the department chair or executive committee will review records and recommend an allocation of the money to professors which has to be approved by the Dean. Then every professor in the department goes to the chair and complains about their raise!

In the longer term, salaries are set by the market. Getting another offer can create competition and sometimes even bidding wars. Sometimes people make the move, other times they get a strong counter-offer and stay.

Econ professors talk about other professors' salaries a fair amount. When they talk about their own, I generally feel like they are, shall we say, less than completely honest.

If you work at a State school the information is public and every so often a newspaper might publish it.

Professors in departments that are hiring at the entry level often compare notes on what their departments are planning to offer new Ph.D.s and where the market for them might clear. New hires tend to negotiate more for 1 time expenses like start up money, moving costs, and temporary teaching reductions, and less on salary where schools often have less flexibility. Deans are seemingly more willing to agree to large-ish one time expenditures more than large recurring expenses like a substantially higher salary for new hires.






6 comments:

Anonymous said...

"When they talk about their own, I generally feel like they are, shall we say, less than completely honest."

Do they understate their own salaries, so that appears they are treated unfairly? Or, do they overstate their salaries, so that it appears they are more in demand?

Anonymous said...

Overstate. In my experience.

zbicyclist said...

"Do they understate their own salaries, so that appears they are treated unfairly? Or, do they overstate their salaries, so that it appears they are more in demand?"

Or both, depending on the audience?

Angus said...

Z-bike: you nailed it!

Anonymous said...

Z-bike, spoken like a true economist.

peter watson said...

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