Determinants of the salaries of rabbis

The effect of communal internal labor markets on the generation of wage differences for prestigious occupations is examined here. We focus on the rabbi as an example of a free professional whose job opportunities are circumscribed within a communal or congregational labor market. Through an analysis of an unusual data set on rabbis in the United States, several hypotheses were tested. The dominant empirical variables explaining salary levels were found to be linked primarily to the rabbis’ communal labor market as reflected in a congregation’s size and general income level. A human capital factor, experience, proved of lesser importance. These results suggest that rewards are generated by a combination of factors allied to the socio-economic status of the local congregation. The significance of such communal labor markets in determining wages is discussed.