How much does it cost to be a scientist?
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We examine the academe–industry wage gap. Once self-selection and different personal characteristics of academic and industrial scientists have been taken into account the wage gap narrows from 28 to 13 %. The counterfactual wage faced by an academic scientist increases with time spent on development and decreases with time spent on research. This finding challenges the idea of a solely negative relationship between science and wages. We further find that preferences for science augment the relationship between research orientation and wages. Overall, the results have implications for policy makers that aim to increase development oriented research activities at universities, individual scientists thinking about whether to pursue a career in industry or academe, and managers trying to hire academic scientists.
KeywordsAcademe–industry wage gap Economics of science Matching
JEL ClassificationG24 O31 O38
Balsmeier gratefully acknowledges financial support from the Flemish Science Foundation. Pellens gratefully acknowledges financial support from the National Bank of Belgium. Both authors thank participants in the LEI & BRICK workshop on the ‘Organization, Economics, and Policy of Scientific Research’, the Technology Transfer Society Conference, the DRUID Society Conference, a lunch seminar at KU Leuven, as well as Dirk Czarnitzki, Lee Fleming, Christoph Grimpe, Reinhilde Veugelers, Stijn Kelchtermans, Henry Sauermann, Toby Stuart, and Scott Stern for their insightful comments.
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