The Effect of Years in Service on Salary of U.S College Tenured Professors

Abstract

People can observe a dilemma that many universities have faced: how to offer a competitive salary to attract a new talented faculty while keeping a fair compensation offer to senior professors, whose are fixed based on a pay scale. Does the tenured professor's salary increase as the year in experience increases? In this research, I will examine a Salaried for Professor data set in the "car" R package to demonstrate the influence of years in services with gender control on the salary of Assistant Professors, Associate Professors, and Professors in the US college. I expect the finding will demonstrate that tenured professors with a high year in service correspond to high salaries.

Null- Alternative Hypothesis

Null Hypothesis: There is no difference in tenured professors’ salary depending on service years.
Alternative Hypothesis: Tenured professors will earn more as years in service increase.

Data Description

The Salaries for Professor data set is the 2008-09 nine-month academic salary includes 397 observations and six variables, consisting of rank (a difference between title: Associate Professors, Assistant Professors, and Professors), discipline (a difference between theory and practical department), years since Ph.D., years in services, gender, and salary. In this research, I will only focus on the years in service variable with the control of the gender variable that affects the salary for nine months in US dollars of tenured professors.

The formula represents a linear regression of salary annually (in US Dollars) based on their years in service and a dummy variable (0-1) depending on the gender of respondents. Based on the intercept, I expect a hypothetical female professor with 0 years of service is 92,356 dollars. The absolute t value is 19.484 (greater than 2); therefore, I can conclude that the test is statistically significant, and the coefficient is significantly different from 0 at 95% of a confidence interval. The years in service coefficient is 747.6; therefore, we can demonstrate that by keeping other factors in the regression constant, gaining one year in service will help the professor's salary increase by 747.6 dollars, and a t-value is 6.7 (greater than 2) that make the test statistically significant. Finally, there is no association of gender in salary, as demonstrated in the t-value is lower than 2, making the test not statistically significant.

Conclusions
Based on the data, I can observe the casual relationship that represents a positive correlation between the years in service and professors' salaries. In more detail, more years in services will cause a higher amount of professors' income. I believe the result is reasonable when more years in service will help tenured professors have more contributions, such as research outcomes to the university that will lead to higher income rewards. Besides that, the more experienced professors tend to be more productive than the less experienced professors while they do not need to be in training for the new projects or classes. Finally, with more years in service, professors always have a greater responsibility, such as being an advisor in a department, or a leader in a research group that helps them earn a higher income. However, it is an observational study, so it contains a selection bias. It might include other omitted variable biases that can influence the result, such as universities where professors earn Ph.D. degree or family backgrounds. According to the data, the factor of gender does not affect the outcome when it is not statistically significant.
Based on the analysis, I can reject the null hypothesis, and the result illustrates the higher salary for professors having higher years in service. The effect of gender on salary remains inconclusive, and and further studies are crucial to guarantee gender equality in a professional environment.