Professors and Hamburgers: An International Comparison of Real Academic Salaries

Li Lian Ong and Jason D. Mitchell

Chapter 6 in The Big Mac Index, 2003, pp 109-121 from Palgrave Macmillan

Abstract: Abstract In recent years, academic staff unions and associations have argued for higher salaries for academics on the grounds that existing salaries have not kept pace with inflation, are well-below commercial salaries and, most glaringly, are much lower than the salaries of their overseas counterparts. However, most international comparisons are made based on exchange rate conversions, which is inappropriate since purchasing power differentials are only reflected in exchange rates in the long term. Furthermore, the volatility of exchange rates makes such conversions highly inaccurate. In this chapter, we provide a comparison of real academic salaries by converting the nominal salaries in each country to their purchasing power equivalents, using the Big Mac Index. Our results show that real academic salaries are highest in Hong Kong and Singapore, relative to the developed countries, while Hong Kong tax and social security deductions are lowest. Furthermore, real salary levels, combined with intrinsic considerations such as the quality of life, indicate that Canada and New Zealand are unattractive places for visiting/migrating academics, while Australia and the US are relatively attractive. We suggest that our findings could be of use to policy-makers and academic unions in salary negotiations, as well as academics making relocation decisions.

Keywords: Exchange Rate; Real Exchange Rate; Academic Union; Real Salary; Salary Negotiation (search for similar items in EconPapers)
Date: 2003
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-51241-2_6

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DOI: 10.1057/9780230512412_6

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