The following literature review is divided into three sections. The first covers the economic theory of compensating wage differentials. Studies discussed in this section concern empirical applications of the theory of compensating wage differentials to a number of different labor market attributes. The second section covers the use and function of tenure within higher education. This section explores the role of tenure within higher education and the ramifications for the academic labor market. And the third section describes the labor market arrangements commonly found within academic librarianship, including the role of tenure and faculty status.
Compensating Wage Differentials
Compensating wage differential models predict wage variations across occupations based on selected job or employee attributes. While some occupations have desirable or agreeable attributes, others have unpleasant or even dangerous ones. Workers and employers agree to a single wage rate that embodies a number of aspects of the employment situation. The theory of compensating wage differentials postulates differences in compensation, which incorporates the negative and positive occupational attributes and equalizes the desirability of disparate occupations.
Adam Smith was perhaps the first proponent of compensating wage differentials, noting the difference in earnings to be found among occupations. In The Wealth of Nations (originally published in 1776) he noted: ‘‘Pecuniary wages and profit, indeed are everywhere in Europe extremely different, according to the different employments of labour and stock. But this difference arises partly from certain circumstances in the employments themselves, which either really, or at least in the imagination of men, make up for the small pecuniary gain in some and counterbalance a great one in others; and partly from the policy of Europe, which nowhere leaves things at perfect liberty’’ (Smith, 1976, p. 111).
Nearly 200 years laterRosen (1974)formalized the theory of compensat- ing wage differentials with a model of hedonic prices. In his model the wage rate is thought to embody job characteristics with implicit prices, which reflect the price at which each job characteristic may be bought or sold.
These prices reflect the compensating wage differentials. A key feature of Rosen’s model is the nature of the matching process between workers and employers. Workers sort themselves into jobs with a given set of attributes based on the workers’ individual characteristics and preferences, resulting in a reduction in wage differentials between jobs and an efficient allocation of labor. The observed differences in wages reflect the positive or negative premium attached to the job attributes by workers(Rosen, 1974).
Rosen’s (1974)article begat a flurry of studies examining any number of potentially negative job characteristics in a variety of labor market settings.
The vast majority of these early studies focused on white males and on blue- collar professions. Later studies expanded coverage to other groups and to a broader array of labor market characteristics.
Table 1 summarizes the most significant recent studies examining compensating wage differentials and labor market conditions. Brown’s research (1980) is typical of much of the empirical work on compensating wage differentials that was conducted in the 1970s and 1980s. Unlike some cross-sectional studies, Brown used longitudinal data drawn from the National Longitudinal Survey (NLS) Young Men’s sample. He examined seven years’ worth of data on the labor market experiences of males aged 14–24 in 1966, excluding those with a college education or who were currently enrolled in college. Data on occupational characteristics were taken from several sources and matched to their occupation or industry.
Brown chose to use longitudinal over cross-sectional data due to the often- documented problems with empirical results, stating that ‘‘the most common explanation is the omission of important worker abilities, biasing the coefficients of the job characteristics’’ (Brown, 1980, p. 118). Brown used
many of the same variables to be found in other studies: work experience, education, unionization, region, and urbanization. Four job characteristics that were theorized to carry a compensating wage differential were examined: repetitive job functions, high levels of stress, duties requiring physical strength, and ‘‘bad’’ working conditions (based on temperature, vibrations, or other job hazards.) Despite using longitudinal data and attempts to correct for both changing conditions and holding worker characteristics constant, Brown found that ‘‘the coefficients of job characteristics that might be expected to generate equalizing differences in wage rates were often wrong-signed or insignificant’’ (Brown, 1980, p. 131).
He suggests that a number of factors may account for this, including job characteristics that are not well measured, additional omitted variables, and varying degrees of competitiveness in labor markets.
Other studies listed in Table 1, while noting some of the empirical difficulties associated with applications of the theory of compensating wage differentials, have had limited success in identifying differentials associated with various job characteristics. Many of these early studies focused on white males in blue-collar occupations.Hamermesh (1977)uses data drawn from an International Survey Research (ISR) survey on working conditions to examine white males aged 21–65, using many of the variables employed by Brown. These included age, education, occupational categorical variables, region, and unionization. Job characteristics examined included noise, weather and heat, ‘‘dirty’’ work, and use of hazardous materials and
Table 1. Compensating Wage Differentials: Sample Studies.
Author(s) (Year) Job Characteristic Sample
Hamermesh (1977) Poor working conditions (noise, hazardous materials)
White males
Lucas (1977) Repetitive working
conditions
White males Abowd and Ashenfelter
(1981)
Unemployment spells White males McGoldrick and Robst
(1996)
Worker mobility Panel study of income dynamics
Graves et al. (1999) Unionization International
Morlock (2000) Employer-provided
insurance
Survey of income and program participation Gariety and Shaffer (2001) Flextime Current population survey Gunderson and Hyatt (2001) Job safety Canadian workers
equipment. While Hamermesh had some success in identifying statistically significant compensating wage differentials, some characteristics (‘‘dirty’’
work) did not carry the expected sign. Lucas (1977), in a cross-sectional study of compensating wage differentials associated with repetitive working conditions for white males, found similar results. Likewise, other studies have found compensating differentials based on unpleasant working conditions or even the probability of death on the job (Dorman, 1996).
Abowd and Ashenfelter (1981)examined the effect of anticipated spells of unemployment on wages. They found that the competitive wage reflects a compensating differential, which varied by industry according to the probability of future layoffs.
Other job characteristics have been examined using the theory of compensating wage differentials. McGoldrick and Robst (1996) examined the effects of worker mobility on the payment of compensating wage differentials for earnings risk. Using the 1979–1984 waves of the Panel Study of Income Dynamics (PSID), they estimated a series of simultaneous equations where both wages and worker mobility were endogenous.
Variables used included mean wage, job change, age, education, experience, job tenure, SMSA size, race, marital status, children, unionization, regional categorical variables, and occupational categorical variables. Unlike many of the earlier studies, McGoldrick and Robst included both men and women in their study. This approach allowed them to examine whether workers with greater uncertainty have a greater mobility and whether greater mobility translated into lower compensating wage differentials. They found that workers experiencing uncertainty with a greater degree of mobility did receive a lower compensating wage differential. As they state, ‘‘yworkers receive compensation for uncertainty and this compensation decreases with mobility’’ (p. 231). Other authors have examined the interplay between unionization and compensating wage differentials. Interestingly, Graves, Arthur, and Sexton (1999) argued that the returns often attributed to unionization may in fact be due to compensation for poor working conditions.
Recent studies have expanded the coverage of the theory of compensating wage differentials to other types of job amenities.Morlock (2000)examined the employer-provided health insurance and compensating wage differen- tials. Morlock used wave 1 of the 1990 Survey of Income and Program Participation (SIPP). Variables included in the study mirror those used in other compensating wage differential studies: age, education, unionization, urbanization, training, and occupational categorical variables. Morlock did include both men and women in the study. He found contradictory evidence
concerning the theory and empirical results, with the greatest differential accruing to those with the employer-provided insurance.
Gariety and Shaffer (2001)examined the compensating wage differentials due to flextime. Data for women were drawn from the Current Population Survey for 1989 and for both men and women for 1997. They found a positive wage differential associated with flextime for women but not for men.
While the theory of compensating wage differentials has yet to be explicitly applied to the area of tenure and higher education,Zoghi (2000) did address some closely related issues. She examined academic freedom, an attribute of tenure, as an amenity within the academic labor market and modeled the willingness to trade wages for academic freedom. Zoghi found significantly higher wages at universitieswithoutacademic freedom and that public universities fight academic freedom more, based on AAUP data.
Tenure in Higher Education
Historically, the debate concerning tenure in higher education has centered on the concept of academic freedom. In the 19th century, the debate usually focused on dissident religious viewpoints as expressed by faculty members (Cohen, 1998). The late 19th and early 20th century debate centered more on political and economic viewpoints. Interestingly, several noteworthy cases dealt specifically with economic beliefs. In 1892 the president of Lawrence College was fired for free trade remarks; in 1894 economist Richard Ely was fired from the University of Wisconsin, accused of promoting public unrest with his views on labor relations; and in 1895 an economist at the University of Chicago was fired for criticizing monopolies and the railroad industry (Lucas, 1994, p. 194). In 1915 the AAUP was formed, with much of its early work dedicated to the defense of professors claiming unfair dismissal by their employing institutions (Cohen, 1998, pp.
127–129).
FrinzMachlup (1964), economist and president of AAUP in 1964, agreed with critics of tenure when they asserted that tenure introduces inefficiencies into the academic labor market and keeps academic salaries low. Note that this statement inherently accepts the notion that tenure creates compensating wage differentials. However, Machlup argues that the benefits accrued to both society and higher education by the academic freedoms protected by tenure outweighed the costs. In another often-quoted essay written for the AAUP, WilliamVan Alstyne (1971)argues that tenure was never meant to be a lifetime employment contract but merely a guarantee of due process.
McKenzie (1996) argues that the contractual relationship of tenure benefits both the institution and the individual faculty member through the screening of potential employees, and through the protection tenure affords from the ubiquitous internal politics often found in institutions of higher education. Other proponents cite the beneficial role of faculty involvement in the administrative infrastructure of higher education. Accordingly, tenured faculty have greater freedom to actively participate in university governance, serving as a countervailing force to university admin- istrators (McPherson & Schapiro, 1999). Another argument focuses on the role of tenure in the hiring and screening process within academia. Without tenure, potentially less productive, tenured professors would be hesitant to hire applicants with greater promise and productivity than themselves (Carmichael, 1988).
Frustrated with the perceived rigidities and inefficiencies introduced by the tenure system, governing boards and legislative bodies have often been some of the most vocal critics of tenure. The chancellor of the Massachusetts Board of Higher Education, troubled by the higher-than-average number of tenured faculty in the University of Massachusetts system, proposed paying new faculty higher starting salaries to forgo the tenure track (Chronicle of Higher Education, 1999). Again, this supports the contention that tenure results in a compensating wage differential.
The Florida State Board of Regents, in an attempt to incorporate alternatives to tenure in the University of Florida system, established its newest campus, Florida Gulf Coast University, under a system of renewable three- to five-year contracts (Cage, 1995). Florida Gulf Coast University opened in 1997, but reports three years later were not encouraging. As of mid-1999, 22% of the original 155 professors had left the campus. Critics charge that administrators released vocal faculty members, despite prior favorable reviews (Wilson, 2000). Other institutions have experimented with either mixed employment options or have eliminated the tenure altogether.
The trustees at the University of South Florida developed 14 actions that could serve as grounds for dismissal, even for tenured faculty. The actions include insubordination and improper conduct. The statement that alarmed faculty the most includes dismissal for ‘‘any other properly substantiated cause or action that is detrimental to the best interests of the university, its students, or its employees’’ (Wilson & Walsh, 2003). Some have argued that such a sweeping statement effectively negates the concept of tenure.
Other questions about the scope of tenure have also entered into the debate in recent years. Concerns in the Texas A&M University system centered on the job benefits guaranteed to faculty members – or exactly
what aspects of employment are protected by tenure. New policies enacted by the university system explicitly state that tenure ‘‘shall not be construed as creating a property interest in any attributes of the faculty position beyond the y annual salary’’ (Wilson & Walsh, 2003). The university system hopes to avoid costly lawsuits over laboratory access, research support, and teaching schedules through the implementation of these policies.
Westark College (located in Arkansas) announced in 1998 that, while retaining tenure for existing faculty, all new faculty appointments would be hired on renewable contracts (Wilson, 1998). According to the AAUP, this reflects a growing trend in higher education. AAUP examined data on employment practices in higher education and found that among full-time professors, approximately 52% held tenure in 1995, the same proportion as in 1975. However, the proportion on tenure track appointments fell from 29% in 1975 to 20 in 1995 (Wilson, 1998).
This increase in the contingent labor force in academic labor markets comes at a price.Ehrenberg and Zhang (2004)studied the effect of part-time and non-tenure track faculty on graduation rates. They found that the increased use of contingent faculty negatively affects the five- and six-year graduation rates of undergraduates enrolled at four-year American colleges and universities.
While many of the strongest criticisms of tenure come from legislators, boards of higher education, or trustees, some criticisms originate from those most familiar with academe. One of the most biting criticisms can be found in Sykes’ (1988)bestseller Profscam. Sykes, son of a professor and former reporter for the Milwaukee Journal, develops a sharply critical analysis of higher education in general, and tenure in particular. He states: ‘‘Tenure corrupts, enervates, and dulls higher education. It is, moreover, the academic culture’s ultimate control mechanism to weed out the idiosyn- cratic, the creative, and the nonconformist. The replacement of lifetime tenure with fixed-term renewable contracts would, at one stroke, restore accountability, while potentially freeing the vast untapped energies of the academy that have been locked in the petrified grip of a tenured professoriate’’ (p. 258).
While less draconian, Breneman (1997) proposes a new examination of the use of tenure in higher education. Breneman is an economist and dean of the Curry School of Education at the University of Virginia. Citing the growing financial disparity between the top 150 institutions and other higher educational institutions, Breneman argues that a one-size-fits-all approach to tenure is no longer viable. Instead, he proposes that many institutions and
disciplines would benefit from the introduction of a greater range of employment arrangements. Faculty who opt out of the tenure track system would need to be compensated for the new additional risk they would assume. Breneman notes: ‘‘Having argued for the case for a wage premium for new faculty who forgo tenure-track appointments, it is worth considering how large that wage premium must be. No neat calculation exists to guide participants on either side of the market; indeed, the only meaningful answer to that question would be an actual market experiment’’
(p. 10). This ‘‘premium’’ would be, in economic parlance, the compensating wage differential.
Academic Librarianship and Tenure
Nowhere has the debate concerning the use of tenure within higher education been more intense than in the field of academic librarianship. The appropriate nature of the professional identity of academic librarians dates back to the earliest days of the profession.
Two key themes are consistently intertwined throughout the literature on academic librarianship: faculty status and tenure. As early as the 1950s, the ACRL attempted to shed light on these issues through the formation of its Ad Hoc Committee on Academic Status (Branscomb, 1970). As noted above, ACRL and its parent professional organization, ALA, formally adopted faculty status in 1971 as the appropriate standard for employment of academic librarians (Meyer, 1999). And in its 1972 joint statement, the ACRL, AAC, and AAUP defined faculty status for librarians in the following way: ‘‘Faculty status entails for librarians the same rights and responsibilities as for other members of the faculty. They should have corresponding entitlement to rank, promotion, tenure, compensation, leaves, and research funds. They must go through the same process of evaluation and meet the same standards as other faculty members’’ (ACRL Academic Status Committee, 1974). The expectations and responsibilities of faculty status for academic librarians has been more fully developed in subsequent standards issued by ACRL, the latest of which is the 2001 version (Association of College and Research Libraries, 2001). Note that the definition essentially remains the same. Core to ACRL’s definition of faculty status is tenure, which ACRL argues should be available to academic librarians on par with other instructional faculty at the parent institution.
Academic librarians are typically required to have an ALA-accredited master’s degree in library science, usually denoted as an MLS degree. In
1975, ACRL endorsed the ‘‘Statement on the Terminal Professional Degree for Academic Librarians,’’ which was reaffirmed by the ACRL Board of Directors in 2001 (Association of College and Research Libraries, 2001).
This statement explicitly states the minimal requirements for professional librarians, saying: ‘‘The master’s degree in library science from a library school program accredited by the ALA is the appropriate terminal professional degree for librarians’’ (Association of College and Research Libraries, 2001). This requirement was challenged in the courts in the mid- 1970s by an applicant who did not hold an MLS. The litigant claimed that Mississippi State University, by requiring an MLS and failing to consider other educational alternatives for professional positions in the library, was discriminatory toward women.Merwine v. Trusteesbecame a landmark case and established the legality of requiring an ALA-accredited MLS for employment as an academic librarian. Since the original 1975 ACRL statement establishing the MLS as the appropriate terminal degree and the failure of the subsequent legal challenge, there has been minimal debate on this issue (Jones, 1998). Therefore, the MLS is considered the terminal degree for academic librarians, even those with faculty status and tenure.
Selected other disciplines also require terminal degrees at the master’s level for academic appointment. Examples include creative writing programs (which often require the Master of Fine Arts or MFA) and landscape architecture programs.
Combined with the 1972 statement on faculty status, these proclamations issued by the major professional association set the standards for conferring faculty status (and tenure) on academic librarians. These standards were augmented by the passage in 2002 of the ‘‘Guidelines for Academic Status for College and University Librarians’’ (Association of College and Research Libraries, 2002). These guidelines fleshed out the 1972 statement, explicitly delineating the conditions of faculty status, including such topics as professional responsibilities, governance, contractual relationships, compensation, promotion and salary increases, access to sabbaticals and research funds, and dismissal and grievance procedures.
Despite this overwhelming support by ACRL, the adoption of these standards within academic libraries has been problematic and controversial.
Indeed, simply establishing how many academic libraries offer professional positions with faculty status and tenure is not easily accomplished.
Numerous studies have been conducted, both prior to the 1972 state- ment and after. The results from these studies depend in part on how the author(s) operationalized the concept of faculty status. This issue has a long history.