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Human Capital and Higher Education

Human Capital and Higher Education. Stylized Facts – Faculty Salary. Salaries in the 1990’s kept pace with inflation Salaries have lost ground when compared to the professions Salaries differ by institutional control Private to public ratio = 1.25 Large field differences

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Human Capital and Higher Education

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  1. Human Capital and Higher Education

  2. Stylized Facts – Faculty Salary • Salaries in the 1990’s kept pace with inflation • Salaries have lost ground when compared to the professions • Salaries differ by institutional control • Private to public ratio = 1.25 • Large field differences • Up to 1.5 times for comparable position • Salary compression across rank

  3. Stylized Facts Source: http://advocacy.collegeboard.org/sites/default/files/12b_5303_PubHighEd_AnalysisBrief_WEB_120530.pdf

  4. Toutkoushian, R. K. (2000). 

  5. Toutkoushian, R. K. (2000). 

  6. Toutkoushian, R. K. (2000). 

  7. Theory of Time Allocation Individuals make decisions about how to allocate their time among competing activities • Time is a scarce resource • Allocation of time to one resource takes away from other resources (zero sum) Individuals choose the allocation of their time to maximize their utility • Sometimes simplified to just income

  8. Work-Leisure Tradeoff Leisure Time Assumes 16 hours in the day to choose between work and leisure (i.e. 8 hours for sleep) 16 16 Work Time

  9. Teaching Research Tradeoff Teaching Time Assumes the professor has chosen to allocated 8 hours in the day to work 8 Research Time 8

  10. Question What are the time tradeoffs in your work? Do you have the option of choosing how you spend your time? What other factors exist that can shift your time constraint?

  11. Faculty Production Function In a simple model, faculty produce research and teaching: If economies of scope exist then:

  12. Production Teaching Output Total output of research and teaching Research Output

  13. Faculty Income Model Faculty are paid based on their production in both teaching and research: If research is valued over teaching: If teaching is valued over research:

  14. Production Teaching Output Slope = Total output of research and teaching Pt Pr Research Output

  15. Questions What are your units of production? How are your incentives weighted between the multiple outputs?

  16. Stylized Facts Source: http://advocacy.collegeboard.org/sites/default/files/12b_5303_PubHighEd_AnalysisBrief_WEB_120530.pdf

  17. Activity • For your assigned propositions from Leslie and Rhoades (1995): • Using evidence from course readings (for all weeks) make an argument in support or against the proposition as described. • Compare the rationales of L&R to other readings.

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