ACADEMIC SALARIES: A century of declining relative pay for Germany’s top professors

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Date:
27 Mar 2014

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The salaries of full university professors in Germany have declined significantly over the past 100 years relative to other highly skilled professionals. That is the central finding of research by Alexander Sohn, to be presented at the Economic History Society’s 2014 annual conference.

At the beginning of the twentieth century, the average salary of a professor in Germany was normally found in the top 1% of incomes – and just after the period of hyperinflation, it was within the top 0.2% of the income distribution. Now, while professorial salaries are in the top 5% of the income distribution, they are far off the top 1%.

Alexander Sohn comments:

‘Although the twentieth century is often acclaimed as the ‘century of human capital’, my research shows that an important contributor to the formation of human capital, the professor, experienced a sharp decline in his economic standing.’

Using individual income data from university archives, this study is able to shed some light on the income distribution of professors at various points in time. It focuses especially on the development of the salaries of full university professors in comparison with the development of top incomes in Germany. This makes it possible to compare the incomes of highly skilled professionals both within and outside the academic labour market. Using material from 15 university archives the study shows a sharp decline of professors' salaries relative to other incomes over the century.

The table below shows the average income of a full professor for six different subject groups and is compared with the average income of an employee (RAY) as well as the relation to the threshold to the top 1% of incomes (R99) at the time.

The results highlight the decline of professors' salaries with respect to average incomes as well as with respect to their old economic peers. At the beginning of the century, the average salary of a professor was normally found in the top 1% of incomes. One professor's income in the sample reached 16,000 M positioning him well into the top 0.5% of the income distribution.

The highest relative standing is found in the years after the Hyperinflation, as top incomes in the sample stand at 29,000 RM, which was fourteen-fold the average income and within the top 0.2% of the income distribution. After the twenties, there was a decline in relative salaries, despite growing student numbers.

At the beginning of the new millennium the threshold of the most well-off percentile stood at 240,000 DM. By contrast the average income of a professor was 141,000 DM still putting him in the top 5% of the income distribution but far off the top 1%, let alone the top 0.5%. Even with the highest possible remuneration of 233,000 DM (Hofmann, 2001) the professor would no longer surpass the threshold to the top 1%.

ENDS

Alexander Sohn, Univeristät Bielefeld

Discipline-dependent mean salaries

Time Period

Chem

Eng

Med

Law

Econ

PHP

1908-1910

9,200 M

7,500 M

8,700 M

13,000 M

N.A.

9,300 M

RAY

 

 

 

 

 

 

R99

117%

95%

109%

164%

 

117%

1926-1928

18,100 RM

18,900 RM

12,900 RM

24,400 RM

22,300 RM

13,900 RM

RAY

866%

904%

616%

1169%

1069%

664%

R99

171%

179%

122%

232%

212%

131%

1933-1936

14,000 RM

12,600 RM

12,200 RM

13,200 RM

12,900 RM

11,000 RM

RAY

810%

728%

703%

764%

747%

638%

R99

154%

139%

134%

145%

142%

121%

1953-1955

22,300 DM

N.A.

21,400 DM

22,700 DM

24,200 DM

20,200 DM

RAY

554%

 

543%

568%

590%

538%

R99

 

 

 

 

 

 

1963-1965

38,400 DM

37,800 DM

29,900 DM

45,900 DM

42,700 DM

43,200 DM

RAY

449%

442%

349%

536%

499%

505%

R99

75%

74%

59%

90%

84%

72%

 

 

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