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The Business and Accounting Advisor

Business survivability in this economy is difficult at best. This blog will offer useful business and accounting advise and ideas for ongoing business and competitive advantage.

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Teachers Pay and the Economy.

October 26th, 2011 at Wed, 26th, 2011 at 11:21 pm by glennsmith

My poor wife, I was sitting tonight reading over the article on suppressor variables and found it so fascinating that I just had to share it with her. Now understand my wonderful bride is in her undergraduate studies today. She has been with me through my entire college experience from undergraduate to my current PhD pursuit. She has heard no ends of information that means nothing to her but today I found the suppressor variable information beyond fascinating. I bet no one reading this ever thought they would think that even if you do agree with me. What I found interesting was the discussion of X1 and X2 effect on each other and thereby X1’s effect on Y even if Y and X have near zero correlation. What this means to me at least to my own dissertation topic which I will share only the highest level here with you is the economic effect of one nation on the accounting principles used by another. Governmental leaders then in China for example could, if the theory holds true wreak havoc on Paraguay by making decisions that affect the China’s economy even if they have no direct influence to Paraguay. Now this is not a suppressor variable unless you find in some way where Paraguay is in direct competition with China for some reason and on some level. We have to find a topic where suppression would be better understood and this can be seen in the educational level of what I like to call political idiots. Education seems to lead at least by this discussions argument which I happen to disagree with to greater liberalism. Income would lead to conservatism (possibly to protect what they have). Income may be a suppressor variable to liberalism and socialism? If it is a suppressor variable then because it has positive effect on education then would it be an additive suppressor both drawing away and adding to the liberal and social attitudes?


A test would have to be devised to test all three of the scenarios. First, we may have to test and see if the political attitudes of students in the undergraduate levels changed from those of the graduate levels. I can say that my own personally have not but then it is conjecture and opinion. You could compare two groups but this would also be problematic. We would need to actually take an undergraduate study and then 4 or 8 years later ask the same group their philosophy to find out if the attitudes had changed. We could examine voting records of the same individual or control group members to determine if the changes occurred but even then I may argue that what was considered a liberal attitude a decade ago is not the same as it is today.


We would then need to examine the indirect effect of income on political attitudes to determine if the indirect or suppressor variable has any effect on variables with little correlation on the r scale. I would believe that direct effect of education on political attitudes would be a more useful study but could not fault either of the studies and suggest they are both hand in hand in importance.


David Castle (2005) argues that his replicated study of findings by McCully and Downey’s identify a suppressor variable in years of service to salary of faculty members. Castle continues to argue that community and technical colleges have a more demonstrated effect here than do research institutions. The research institutions reward publishing and the community college’s and institutional colleges reward years of service. This suppressor variable can only be found when colleges face tight economic problems or funding restrictions and therefore do not even give the teachers raises in salary to meeting the barest consumer price index increases. This would further my argument significantly which states that economics would in fact change principles of accounting use. If CPI or COLA is ignored or not met by institutions employees would be forced to change principles of accounting due to economic times faced by them.  In the same way that length of service may be considered a positive the fact that wage increases do not match over time the CPI increases over time makes the length of time a suppressor variable this same variable would be applied to my own dissertation topic even at the highest level.


Ranson (1993)  agrues that in most industries years of service is typically usually leads to higher pay. Ransom continues to argue that this is central to many theories of life-cycle structure of pay. This is not the case in education where a monopsony exists. Ransom argues that discrimination toward longer serving teachers is a suppressor variable causing difficulties for teachers today and hurting the educational system within the United States.

Glenn Smith is a teacher and college instructor at the University of Phoenix, the International Academy of Design and Technology and the Roskilde school of Denmark.


Castle, D. S. (2005). Estimating Seniority Effects in Faculty Salary Studies: Measurement and Model Specification. [Article]. Public Personnel Management, 34(4), 377-384.


Henard, D.H. (1998). Suppressor variable effects: Toward understanding an elusive data dynamic. Houston, TX


Ransom, M. R. (1993). Seniority and monopsony in the academic labor market. [Article]. American Economic Review, 83(1), 221.


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