University revenues and faculty salaries in Ontario: 1970/71-2003/04

Average faculty salaries at 15 Ontario universities, 1970/71-2003/04, are examined. There were four distinct regimes of government policies and funding of universities, and faculty salaries mimicked the behaviour of funding in each. Consistent with a supply and demand framework, increases in faculty employment are associated with increases in salaries and the same for decreases. Different types of university funding are estimated to have different effects on the number of faculty; and the impacts of funding are decomposed into employment and salary effects. Average faculty salaries performed poorly compared to those of other professionals and construction union rates, but did better than teachers' salaries, which showed steady declines from 1995 to 2001. Controlling for changing ages and ranks of faculty over the period, average salaries trended downwards, albeit unevenly, over the period studied. Salaries rose sharply after 1998, but remained below the levels of the early 1970s.