The Pay of Finance Professors

52 Pages Posted: 1 Oct 2021 Last revised: 17 Jan 2024

See all articles by Claire Celerier

Claire Celerier

University of Toronto - Rotman School of Management

Boris Vallee

Harvard Business School - Finance Unit

Alexey Vasilenko

Northeastern University - D’Amore-McKim School of Business

Date Written: August 18, 2022

Abstract

Using data from over 75,000 professors across fields and U.S. universities, we quantify a 50\% wage premium for Finance research faculty. We document a positive correlation between students' future earnings and faculty pay across fields. In addition, within fields, faculty wage elasticity to students' lifetime earnings is three times higher in Finance than in other fields. Evidence suggests that higher student earnings lead to increased university revenues. Competition for talent and fairness considerations may explain why Finance professors obtain a fraction of these additional revenues, hence accounting for a pronounced wage spill-over from the industry to academia in Finance.

Keywords: Labor and Finance, Compensation, Economics of Education, Com- petition for Talent, Rent sharing

JEL Classification: J31, I23

Suggested Citation

Celerier, Claire and Vallee, Boris and Vasilenko, Alexey, The Pay of Finance Professors (August 18, 2022). Available at SSRN: https://ssrn.com/abstract=3933193 or http://dx.doi.org/10.2139/ssrn.3933193

Claire Celerier (Contact Author)

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

Boris Vallee

Harvard Business School - Finance Unit ( email )

Boston, MA 02163
United States

Alexey Vasilenko

Northeastern University - D’Amore-McKim School of Business ( email )

360 Huntington Ave.
Boston, MA 02115
United States

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