Earnings Profiles of Department Heads: Comparing Cross-Section and Panel Models

James F. Ragan and Qazi Najeeb Rehman

ILR Review, 1996, vol. 49, issue 2, 256-272

Abstract: Academics who become department heads suffer declining research skills because of time spent performing administrative tasks, and this skill depreciation slows future wage growth. This study examines Kansas State University faculty who served as department heads during the period 1965–92. Cross-section estimates of the compensation for serving as department head are biased upward because of a correlation between unmeasured productivity characteristics and selection as department head. To correct for this bias, the authors reestimate earnings equations using a panel model that incorporates personal fixed effects. Although the average department head in the sample received a wage premium of 12%, the premium for past administrative service had completely disappeared for the typical former head. Another finding is that skill depreciation was most severe and wage growth most adversely affected in the sciences. As compensation, department heads in the sciences received a larger initial administrative premium than did other department heads.

Date: 1996
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Persistent link: https://EconPapers.repec.org/RePEc:sae:ilrrev:v:49:y:1996:i:2:p:256-272

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