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A Bayesian Look at American Academic Wages: The Case of Michigan State University

Majda Benzidia and Michel Lubrano ()

No 1628, AMSE Working Papers from Aix-Marseille School of Economics, France

Abstract: The paper investigates academic wage formation, taking as a benchmark the Michigan State University. We model wage distributions using a hybrid mixture formed by a lognormal distribution for regular wages and a Pareto distributions for higher wages, using a Bayesian approach. With this model, we test for the presence of superstars in the Pareto member by comparing inequality in the two members. We found some evidence of superstars when recruiting Assistant Professors. However, a dynamic analysis reveals that they have a higher rate of outing, and, if they stay, a lower rate of wage increase. For full professors, we found a phenomenon of wage compression as if there were a kind of higher bound, which is just the contrary of a superstar phenomenon.

Keywords: wage determination; academic market; superstars; tournaments theory; human capital; Mincer equation; Bayesian inference; hybrid mixtures (search for similar items in EconPapers)
JEL-codes: C10 C11 C46 J20 J24 J30 J45 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-lma
Date: 2016-10
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