How Much is that Star in the Window? Professorial Salaries and Research Performance in UK Universities

53 Pages Posted: 22 Nov 2016

See all articles by Gianni De Fraja

Gianni De Fraja

Universita' di Roma; University of Nottingham; Centre for Economic Policy Research (CEPR)

Giovanni Facchini

University of Nottingham

John Gathergood

University of Nottingham - School of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: November 2016

Abstract

We study the relationship between academic salaries and research performance. To this end, we use individual level data on the salary of all UK university professors, matched to results on the performance of academic departments from the 2014 government evaluation of research. The UK higher education sector is particularly interesting because professorial salaries are unregulated and the outcome of the official research evaluation of universities is one of their key financial and academic concerns. We first present a simple model of university pay determination, which shows that pay level and pay inequality in a department are positively related to performance. Our empirical results confirm these theoretical predictions; we also find that the pay-performance relationship is weaker for the more established and better paying universities. Our findings are also consistent with the idea that higher salaries have been used by departments to recruit academics more likely to improve their performance.

Keywords: Higher education competition, Research Excellence Framework, Research funding, Salary inequality, University sector

JEL Classification: D47, H42, I28, L30

Suggested Citation

De Fraja, Gianni and De Fraja, Gianni and Facchini, Giovanni and Gathergood, John, How Much is that Star in the Window? Professorial Salaries and Research Performance in UK Universities (November 2016). CEPR Discussion Paper No. DP11638, Available at SSRN: https://ssrn.com/abstract=2873535

Gianni De Fraja (Contact Author)

University of Nottingham ( email )

University Park
Nottingham, NG8 1BB
United Kingdom

Universita' di Roma ( email )

Dipartimento SEFEMEQ
Via Columbia n.2
Rome, Rome 00133
Italy

HOME PAGE: http://www.economia.uniroma2.it/docenti

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Giovanni Facchini

University of Nottingham ( email )

University Park
Nottingham, NG8 1BB
United Kingdom

John Gathergood

University of Nottingham - School of Economics ( email )

Sir Clive Granger Building
University Park
Nottingham, NG7 2RD
United Kingdom

HOME PAGE: http://https://sites.google.com/site/gathergoodjohn/

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