INOMICS has been offering students and professionals a comprehensive online resource for their
academic and career choices since 1998. Amongst the services it provides is an Annual Salary Report. This is a summary of the main findings of the 2018 Report, published earlier this year. Full details of the survey and of INOMICS’ other activities can be found at their website.
The results of this report were compiled from information collected by an online questionnaire between September and November 2017. The questionnaire was advertised by social media and by email.
The sample
This year, more answers were collected than in any previous year, with 2175 people responding from 116 countries. Participants of the Salary Report Survey 2018 were asked to disclose information about their current annual salary in US Dollars, their highest academic degree, level of seniority, subject area, number of years of work experience and type of employer.
Unlike previous years, the 2018 Salary Report includes a five-year and a two-year comparisons of average salaries for particular positions in academia. The main part of the Salary Report 2018 consists of an analysis of average salaries according to such criteria as level of academic degree, sector of work — academia or the private sector, number of years of work experience, seniority and gender. Selection of the countries and continents analysed in the Salary Report 2018 reflects the number of respondents and their geographical location.
The reported salaries do not take into account such factors as cost of living or possible conversion errors amongst respondents.
Main findings, 2018
Average salaries by academic degree
• In 2017, bachelor’s and master’s degree holders earned 35 per cent and 27 per cent more, respectively, than in 2016.
• Average salaries of PhD or higher degree holders decreased by 12 per cent in 2017 compared to 2016.
• Obtaining a PhD or higher degree is still financially rewarding, however, the difference in remuneration between master’s degree holders and PhD or a higher degree holders, is not as significant this year as it was in 2016.
Average salaries in academia and the private sector
• In academia, bachelor’s degree holders are better financially compensated than in the private sector.
• In academia, average salaries of bachelor’s degree holders almost doubled in 2017 compared to 2016.
In academia in the USA and Germany, salaries are on average 10 per cent higher than private sector salaries, but these countries are exceptions to the global trend.
• The only continent where respondents employed in academia earn significantly more than those working in the private sector is Asia.
• Researchers in the private sector earn on average 30 per cent more than researchers employed in academia, with Australia & Oceania being the only exception to the global trend.
• The highest average salaries for almost all positions in both academia and the private sector, are in the United States of America, Switzerland and in Canada.
Level of seniority
• Asia is the only continent where junior-level specialists in academia earn more than mid-level specialists.
• In Asia, Central and Southern America, salary growth is not directly proportional to seniority, as in North America, Australia & Oceania and in Western Europe.
Years of experience
• During the first five years of work experience, employees in academia tend to earn more than those who are working in the private sector.
• After the first five years onwards, private sector workers earn on average 24 per cent more than those in academia.
• There are more people in academia than in the private sector considering themselves ‘juniors’ after five to ten years of work experience.
Gender
• The most noticeable gender salary gaps can be observed at senior-level positions both in academia and the private sector.
• In academia at all levels, the average salary of a male is on average 18 per cent higher than of a female.
• Both in academia and the private sector a ‘glass ceiling’, making it difficult for female economists to get into senior positions, was observed. In addition there are indications of a ‘salary-ceiling’, causing women in senior-level positions to earn less than their male counterparts.
• When comparing 2017 to 2016, in academia, a positive tendency towards less gender pay disparity worldwide was observed for several positions, particularly PhD candidates and full professors.
Conclusion
Key findings show that on average globally, economists in the private sector earn more than those in academia. As a continent, Asia was found to provide the only exception to this global trend, with economists employed in academia earning somewhat more. Nevertheless, bachelor’s degree holders and junior-level position workers have more chances to be better off in academia than in the private sector. This was most pronounced for junior-level Asian economists.
The most significant differences in private sector and academic economist salaries were observed in Europe, both in Western and Eastern, where the private sector seems to be particularly lucrative in comparison to academic positions.
For those considering continuing their education, it is still the case that a PhD is financially rewarding. That being said, the added value of a PhD seems to have reduced somewhat from last year, a possible trend that will be observed closely in next year’s Salary Report.
Interestingly those who are in the early stages of their career, with five years of work experience or fewer, are better financially rewarded in academia than in the private sector.
From a geographical perspective it was found that professionals from Switzerland, the United States and Canada earn the highest salaries in both academia and in the private sector.
As in previous Salary Reports we confirmed the continued existence of a gender pay gap in both academia and the private sector. In both sectors the gap seems to be wider in senior-level positions. In academia Australia & Oceania is the only exception to the global trend, where women in senior-level positions reported to earn 9 per cent more than men. In the private sector several exceptions were found as well. For instance, in North America senior-level female economists typically earn the same or slightly more than their male equivalents.
In the Salary Report 2018 a two-year comparison of average salaries of female and male professionals from academia was made for the first time. The results showed that some positive trends towards less gender salary disparity can be observed worldwide at several positions, particularly, PhD candidates and full professors when average salary levels of 2017 are compared to average salary levels of 2016.
It was also observed that female economists are underrepresented at the senior-level in both academia and the private sector. In addition, in many countries there appears to be a salary ceiling for those female economists who do reach a senior position, with women in these positions earning less than their male equivalents.
