We examine the internal market for department chairs in U.S. universities and pro-vide the first empirical evidence concerning the determinants of departmental chair service using data from the economics departments in eight large public universities. The results reveal the wage premium for chairs increases with length of service and continues for an extended period thereafter. The chair premium largely represents com-pensation for foregone research and the attendant atrophy of research skills. The empir-ical results also indicate that departments tend to choose productive scholars to serve as chair, but avoid putting their most productive scholars in that position unless they are past their peak productivity period in their life-cycle. We thank an anonymous referee for helpful comments and suggestions on an earlier version of this paper. We are responsible for any errors.
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