Own-Price and Cross Elasticities of Demand for College Faculty

Abstract

Budget problems in many states, together with declining public sector subsidies and level or falling enrollments, have significantly affected academic labor markets [10].' While a few fields have withstood these adverse influences due to increasing enrollments (viz., computer sciences), most have experienced either no growth or declines in the number of faculty positions. Even senior faculty positions have been vulnerable in institutions where whole programs and/or departments have been eliminated. A consequence has been that colleges face pressure to lower costs by substituting lower ranked (LRF) for higher ranked faculty (HRF). If cost is an important factor determining the distribution of faculty across ranks, we would expect an increase in the overall proportion of LRF over time since LRF are paid less than HRF and more easily terminated when budgets tighten.2 Alternatively, if institutional and/or demographic factors dominate the hiring decision then the proportion of LRF would be expected to decline. This is because existing faculty expect promotion to the senior ranks and hence will pressure their colleges to create additional upper rank positions. Moreover, since tenure places limits on the opportunities that colleges have to substitute LRF for HRF, position declines will, of necessity, come at the lower ranks. Finally, since the more prestigious faculty are usually in the senior ranks an institution wishing to upgrade is likely to hire HRF. What actually happened to the distribution of faculty among the several academic ranks in the academic year period 1967/68 to 1978/79 is shown in Table I. The data suggest that the proportion of HRF faculty has grown more rapidly than the number of LRF. For example, assistant professors account for less than 26% of the labor force in the fall of 1978 (down from 29% in 1967) while full professor positions rose from 21% to 25% of the total. The overall positive growth in the number of female positions is substantial while that for males is negative. Dramatic sex differences also exist between ranks. LRF growth is largely due to the hiring of females while HRF growth is largely due to the hiring of males. While