TY  - JOUR
AU  - Ehrenberg,Ronald G.
AU  - Pieper,Paul J.
AU  - Willis,Rachel A.
TI  - Would Reducing Tenure Probabilities Increase Faculty Salaries?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5150
PY  - 1995
Y2  - June 1995
UR  - http://www.nber.org/papers/w5150
L1  - http://www.nber.org/papers/w5150.pdf
N1  - Author contact info:
Ronald G. Ehrenberg
Cornell Higher Education Research Institute
271 Ives Hall East
Ithaca, NY  14853-3901
Tel: 607/255-3026
Fax: 607 255 4496
E-Mail: rge2@cornell.edu

Paul Pieper
Dept. of Economics, MC 144
University of Illinois-Chicago
601 S. Morgan St.,
Chicago, IL 60607-7121
Tel: 312-996-5214
Fax: 312-996-3344
E-Mail: pjpieper@uic.edu
AB  - The simplest competitive labor market model asserts that if tenure is a desirable job characteristic for professors, they should be willing to pay for it by accepting lower salaries.  Conversely, if an institution unilaterally reduces the probability that its assistant professors receive tenure, it will have to pay higher salaries to attract new faculty. Our paper tests this theory using data on salary offers accepted by new assistant professors at economics departments in the United States during the 1974-75 to 1980-81 period, along with data on the proportion of new Ph.Ds hired by each department between 1970 and 1980 that ultimately received tenure in the department or at a comparable or higher quality department.  We find evidence that a tradeoff did exist.  Equally important, departments that offer low tenure probabilities to assistant professors also paid higher salaries to their tenured faculty.  We attribute this to their need to pay higher salaries to attract tenured faculty from the external market.
ER  -