Inderscience Publishers

Scientists' salaries and the implicit contracts theory of labour markets

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Government intervention in labour markets is often justified by citing phenomena in actual labour markets which deviate from the predictions of neoclassical theory. The case for such intervention will be considerably weakened if the anomalous phenomena can be explained by implicit labour market theories that are extensions of the neoclassical theory. The purpose of the current research is to test two well-defined alternative implicit labour markets models of the labour market for scientists. The test makes use of a longitudinal data set compiled by the author that contains data for scientists on number of citations per year and on annual salaries. The evidence, although somewhat mixed, tends to support the "learning model" over the "incentives model". The most dramatic evidence is that the effect of citations on salaries declines as the scientist gains experience. More evidence will be required before we can reach sound general conclusions on the empirical success of the theories.

Keywords: learning, incentives, scientists', salaries, implicit labour markets, compensation, scientific reward structure

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