Consider two states that are nearly identical in terms of such factors as income, climate, and population. There are public universities in both states. One state has a law which specifies that all professors of a given rank (assistant, associate, and full professor) have to be paid the same. Thus an assistant professor, whether in history or in law, has to be paid the same. Associate professors are paid more than assistant professors. However, all asso- ciate professors have to be paid the same. The same is true for full professors. The other state does not have such a law. In this state, law professors are paid substantially more than history professors within each rank. The laws in both states allow the universities to choose their own teaching loads for faculty. These loads can vary across faculty members.
a. How do you expect the teaching loads to vary across the two states (you can focus on history and law departments)? Explain the economic reasoning behind your answer.
b. Are either history or law professors in the state with the law necessarily better or worse off than their counterparts in the state without the law? Explain.
c. Discuss how the residents of the state might be made worse off by such a law.