How did university employment change during the financial crisis?

Universities were not spared during the financial crisis. I have been evaluating how shocks to financial resources of universities influence real activity at universities. This post focuses on the employment decisions of universities around the financial crisis.

Universities during bad times have to cut costs. One of a universities biggest costs is the staff. There are many categories of staff, such as part time workers, instructors and tenured professors. The following charts examine how employment changed. 

It is not obvious how universities will treat part time staff. On the one hand, part time staff may be more easily laid off (less institutional knowledge, more temporary positions). On the other hand, universities may try to reduce large fixed costs - fully contracted employees. One way to reduce head count is to replace full time staff with part time staff. The chart below suggests there is evidence that universities were expanding part time staff in the years up to the crisis. During the crisis, universities did seem to halt growth of part time staff. Fiscal year 2010 shows a marked increase in part time staff. Fiscal year 2010 runs from July 1, 2009 to June 30, 2010. The stock market hit bottom in March 2009, so the chart is consistent with a story that universities shifted to more part time staff. Let's examine what happened to full time staff.

The chart below shows university decisions regarding full time staff. Leading up to the financial crisis, universities were adding full time staff at a fairly brisk rate. However, just a the crisis hits, there is a large drop in the growth rate to 0%. The growth remains lower than pre-crisis. This result contrasts with the sharp growth in part time positions in fiscal year 2010 of 2-3%. This evidence is again consistent with  universities substituting away from full time staff in favor of part time staff.

Tenure track faculty are typically assistant and associate professors focused on securing a permanent, tenured position as a faculty member. Growth of tenured track faculty may decline for two reasons. First, universities may limit new tenure-track positions. Second, universities may transition less tenure-track faculty to tenured status. The chart below shows that on average universities were likely expanding tenure-track opportunities, especially in fiscal year ending June 2008. Once the crisis hit, positions declined markedly. The whiskers on the scatter plot are 95% confidence intervals showing that in 2008 there is evidence consistent with growth in tenure-track faculty and in 2010 and 2011 there is evidence consistent with sharp reductions in tenure track faculty.