Academic pay scales have two similar problems to professional athletics: 1) rookies get paid too much relative to veterans, and 2) veterans are punished for loyalty and rewarded for willingness to move.
Academics also suffers from the fact that the inmates are running the asylum. This means that point 1 is used by faculty in other departments to push for raises when your department hires new faculty. It also implies through points 1 and 2 that the faculty most hurt are the ones who are both loyal and members of booming disciplines.
The result is strong bias towards administrative policies that yield salary compression - the overpaying of the least valuable by the underpaying of the most valuable.
The problem is that salary compression is a pretty hard thing to measure. This is where clever economists with access to natural experiments and the insight to use the data come in.
Financial Rounds summarizes the findings. It seems that in New Zealand, pay is based on rank, rather than on your ability to generate better offers and willingness to vote with your feet.
Essentially, this is a comparable worth system for academics.
A standard economic argument then suggests that disciplines that are paid less should thrive more readily in New Zealand, and those that are paid more should have greater difficulty.
The results show that the following disciplines are strong in New Zealand: anthropology and archaeology, philosophy, earth sciences, and ecology, evolution and behavior.
The following disciplines are weak: design, education, nursing, and sports and exercise science.
(Since this is an economics blog, amongst business disciplines New Zealand is strongest in economics, and weak across the board in everything else).
Marginal Revolution adds that this is a well understood phenomenon in economics known as adverse selection (for which a Nobel Prize was awarded in 2001). It not only explains academic quality in New Zealand, but also why used cars are usually lousy even though the used car dealers friends and family don't get lemons.
Alex at MR adds archly a prediction that the study's author, Glenn Boyle, is unlikely to stay in New Zealand because of his good curriculum vita. Ah ... but there are non-pecuniary benefits.
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