It Pays to be an Economics Teacher

The Bureau of Labor Statistics has released its National Compensation Survey for July 2004.  How did economics teachers fare?  See pages 5 and 6.

According to the survey, the average economics teacher earned an hourly salary of $63.98 with a standard error* of $11.96 and a relative standard error** of 18.7% .  They worked an average of 43 hours a week.  Assuming the average econ professor works 39 weeks out of the year (75% of 52 weeks, or, roughly, based on a 9 month appointment), this works out to $107,294 per academic year.

The mean for economists is by far the largest average salary of all the different college and university teacher classifications.  This classification also ranks highly in terms of the spread of the various data values, suggesting that there are some very high and very low values in the data.  Economics teachers also worked more hours, on average, than others in the college and university classifications.

Assuming this report is accurate, what is driving the average salary figure?  Here is a small and non-exhaustive list

1.  Competition between elite schools for elite faculty is pulling up salaries for these profs and is pulling up the salaries of econ profs at other schools.
2.  The popularity of the econ major on many college campuses has driven up the demand for econ profs
3.  Increased demand in the private sector for those with graduate-level econ training has decreased the supply of econ profs available to colleges and universities.  Oddly, the average economist (non-academic, I believe from the data), has an hourly wage ($33.02) about half that of the average econ professor (see page 6).

Update1:  Craig Newmark thinks these estimates are high.  I tend to agree.  First, I'm (and Craig is) not sure just exactly what types of profs the good folks at the BLS categorize as economics professors.  Are finance professors included as an econ prof?  Also, I saw some data from the MnSCU (Minnesota and State Colleges and Universities) system and there wasn't a single prof who worked in an econ department that was paid over $100G.  That data was over a year ago, but there is no way the average econ prof salary at MnSCU has risen over $100,000.

Today is my slightly-smaller-teaching-load day, so I'll see if I can dig up any information on what an econ prof is according to the BLS.  And something tells me the economics blogosphere will be buzzing over this topic today.

Update 2:  Here is the definition of the BLS category "Teachers, College and University."  Economics teachers are different from "Business, Commerce and Marketing" teachers.  Of course, given the poor use of commas these days, I don't know if Business, Commerce, and Marketing are three separate classifications grouped together as one for BLS purposes or if "Commerce and Marketing" is a fuller description of what is categorized as "Business."  It's also not clear where finance professors fit.

Some statistical stuff:

*The standard error is a measure of how widely spread out the data values are - a measure of the standard deviation of the sampling distribution.

**The relative standard error is a measure of how widely spread out the sampled data values are.  It's defined as the standard error divided by the average

Comments

[The Bench Jockey]

Since your so well-heeled, how about $10?

For a good cause, mind you...(g)

[Phil Miller]

I wasn't surveyed. But the next time I visit, I'll buy the pizza! ;-)

[Donald A. Coffin Donald A. Coffin]

According to the AACSB salary survey, the (2003/2004) average salaries for economics professors, by rank, are:

Full $100,300
Assoc $72,900
Asst $68,500
Instr $48,200
NewPhD $69,500

Even if you update that at 5% per year (ha, ha) for the past two years...and even if you annualize it...
Keep in mind that AACSB data tend to have higher representation of research-orientd, higher-paying institutions. So, if anything, these data will overstate the salaries of all econ profs.

And, of course, we are getting paid pretty well--just not as well as the WSJ or the DoL apparently thinks we are.