Median salaries of Ph.D’s are substantially higher for those in
nonacademic employment that for those employed by colleges and universities,
even after salaries paid on an academic year basis are adjusted upward to a
full-year basis. The differences can be seen both in cross—section estimates
for 1987 and in fixed effect estimates based on data for Ph.D's who changed“
sectors between 1985 and 1987. The most likely explanation of these
differences is that they are compensating differentials reflecting the
advantages of academic employment, including greater autonomy and (for those
with tenure) greater job security.