B-School Economists Paid Less
Is new hire salary reflecting departmental ranking?

Most top-ranked economics departments are housed outside business schools with less than a third of all economics departments housed in business schools. This month's survey news and Data Direct chart comes from an analysis of the University of Arkansas' "Survey of the Labor Market for New PhD Hires in Economics 2004-2005." The following was submitted by Katherine A. Deck with the Center for Business and Economic Research at the Sam M. Walton College of Business.

On average in 2003-04, economics departments in business schools paid new PhDs 4.9 percent less than their counterparts in other colleges. The average starting salaries were $65,438 and $68,630, respectively. Differences remain in the amounts paid to senior faculty new hires as well. Senior assistant professors (without tenure), associate professors (with and without tenure), and professors were paid 6.3 percent, 7.8 percent, and 1.4 percent less in colleges of business than in other colleges.

Of the 182 respondents to the survey conducted in the fall of 2003, 179 answered the question about whether their economics department was housed in a business school or college of business. Overall, 30.7 percent of the respondents indicated that the economics department was in a business school, although only 5.9 percent of the Top 30 respondents responded positively while 37.3 percent of master's- and bachelor-degree- granting institutions responded positively.