Economics of University Teaching

Today I wanted to ask a simple, specific question: How does my salary relate to the amount of teaching that I do? Let’s take a look:

  • I’m paid $105,000 per year, so with benefits I probably cost $150,000.
  • Sabbaticals increase my cost by about 13%.
  • An in-state student will pay $6500 in tuition for 26 credit hours of coursework during the 2012/2013 school year, or $250 per credit hour. A typical course is 3 or 4 hours and therefore costs $750 or $1000 to take.
  • Putting these pieces together, my cost is equivalent to 680 credit hours of teaching per year.

In reality, I teach around 375 credit hours worth of courses in a typical year; definitely not enough to cover my salary. But what is the big picture? Here are a few other things to think about:

  • My salary doesn’t come directly from tuition—it’s in the state budget, paid using tax revenue.
  • Students who are not Utah residents pay approximately 3x more tuition.
  • Grad student tuition is more expensive than undergraduate. However, a lot of grad students get tuition waivers.
  • If I taught at an expensive private school, tuition would easily cover my salary. For example, a credit hour at Yale costs six times what it costs at Utah.
  • Some professors teach quite a few more credit hours than I do, though many teach fewer.
  • An instructor would typically teach many more credit hours than I do. Three of the four instructors employed by my department make less money than I do, but not by a lot.
  • In a typical year, I bring in several times my salary in grants.

The interplay between state funds, tuition, and grants makes it hard to simply follow the money. This post doesn’t have a specific point to make, but I wanted to set the stage for a subsequent piece. State salaries such as mine are public information.

14 thoughts on “Economics of University Teaching”

  1. Neat. I make a little more, but (I guess) spent a little more on the local taxes and other things here and there (like houses in Chicago).

  2. unless things have changed in the last 30+ years, i was under the impression that undergraduate tuition subsidized research, not teaching at large private universities.

  3. Hi Mark, I honestly have no idea what subsidizes what around here, and would appreciate a pointer to a reference about this if you have one handy.

  4. @Mark 4, John 5: In this context, are you defining “subsidizing” to imply a causal relationship? E.g., I guess the hypothesis “tuition subsidizes research but not teaching” would predict that over the past 10 years rises in tuition have tracked rises in the costs of research, while *not* tracking rises in the costs of teaching.

    Personally (influenced by American political discourse) I think of the statement “X subsidizes Y” as simply what you get when you run the statement “X is profitable and Y is not” through an animistic-fallacy filter (

  5. Hi Arthur, I’m not sure how to define subsidizing, though I do know an invasive way to test for it, which is to separate the teaching and research missions into financially independent units. I could still work for both of these units (each would pay a part of my salary) but a financial firewall would make it clear where the money goes and comes from.

    I have often wished we could build this kind of financial firewall between the athletic and academic programs at universities.

  6. Hi Robby, I believe I’m at the low end of the pay spectrum for associate profs in CS at R1 schools in the USA. Not sure why, though it could simply be that I haven’t made myself obnoxious asking for raises, and also I got tenure in 2009 when there were basically zero raises to go around. Cost of living is certainly a factor. Also I feel lucky when I talk to faculty for example in humanities.

  7. > In a typical year, I bring in several times my salary in grants.

    Seems to make the “salary / tuition hours” calculation just fundamentally broken, though you’re using only non-summer pay, etc., right?

  8. Hi Alex, I think it’s complicated…

    As you know, 2/3 of the grant money gets spent directly by me, mainly to pay students. The remaining 1/3 goes into the university coffers and then is spread around in complex ways. A tiny bit of it comes back to me as “returned overhead” which is nice although the rationale for it has never made a lot of sense.

    Here, a former dean from GA Tech says that universities lose money on sponsored research:

  9. This seems to assume a $0 cost of all other intructional aspects of the university (buildings, academic advisors, A/V, registrar, adminstration, library, …).

  10. Hi Sam, I’m ignoring those costs since I have no idea how to estimate their magnitudes. But certainly they would need to be factored into any realistic accounting.

  11. Sure, the answer is an “it depends.” His #1 is a little tricky — how much teaching loads reduce varies a lot, and happens more heavily the more “research university” a place is, to my knowledge. Course buyouts at least are purchased with grant money, so they probably shouldn’t count against. Also, he seems to be counting humanities/nontechnical fields in here, where I do indeed assume it’s a mug’s game if money is your goal. I am less convinced in technical fields, at least in fields your university has a decent presence in, so payoff on proposal writing time isn’t bad. OTOH, only our accountants really know, if anyone.

  12. Overall, I would not be surprised if 1) most universities lose money on research and 2) most lose money on sports. Doesn’t mean that Notre Dame football is a giant drain on the coffers, though I suppose I don’t know for sure.

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