Determinants of Faculty Salaries at Elite Liberal Arts Colleges

ABSTRACT

In this paper we focus on the determinants of faculty salary levels at elite liberal arts colleges using cross-section regressions for the academic years 2001-02, 2006-07 and 2007-08. Our primary finding is that even after controlling for the positive effect on salaries of institutional resources (net tuition revenue and endowment per student), higher ranked colleges pay higher salaries. Colleges located in regions of the country with higher per capita personal income pay higher salaries, as do colleges with larger enrollments. Student/faculty ratio, gender composition of the faculty, and relative emphasis (as measured by the fraction of degrees awarded) on science and mathematics vis-à-vis social sciences and humanities have no relationship with salary levels across colleges. Colleges with more emphasis on research pay higher salaries, but only in the later years. These estimated relationships appear to be stable over time.

Steven L. Green (corresponding author) Kellie Konsor

Professor of Economics & Statistics PhD Candidate in Economics

Department of Economics Department of Economics

Baylor University Purdue University

One Bear Place #98003 West Lafayette, IN 47907-2056

Waco, TX 76798-8003 Email: kkonsor@purdue.edu

Email: steve_green@baylor.edu

Telephone: 254-710-4543