Graduation Year

2025

Date of Submission

4-2025

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics

Reader 1

Julio Garin

Reader 2

Daniel Firoozi

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Terms of Use for work posted in Scholarship@Claremont.

Rights Information

© 2025 ZeXuan Zhang

Abstract

Amid the growing reevaluation of college affordability and student outcomes, concerns about the long-term effectiveness of higher education have intensified. This study examines whether faculty compensation can serve as a predictor of graduate earnings across U.S. colleges and universities. Using institution-level panel data from the College Scorecard (2008–2015), I analyze how average monthly faculty salary, as a proxy for instructional expenditure, correlates with student earnings ten years after enrollment. I apply Ordinary Least Squares (OLS) regression models and control for a broad set of institutional and demographic variables, revealing a consistent and positive association between faculty pay and graduate earnings. This relationship holds across sectors, regions, and income levels, though its strength varies with institutional characteristics and student populations. Rather than treating faculty salary as a routine operational cost, this paper positions it as a strategic expenditure with implications for institutional performance and economic mobility. Despite limitations related to the use of institution-level data, the findings contribute to ongoing debates about how colleges allocate resources and deliver value. Prioritizing faculty compensation stands out as a potential lever for improving educational outcomes, enhancing the long-term impact of higher education, and informing future policy directions on institutional spending priorities.

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This thesis is restricted to the Claremont Colleges current faculty, students, and staff.

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