Let’s Just Get Rid of Tenure (Including Mine)

If there was ever a time when it made sense for economics professors to be given tenure, that time has surely passed. The same is likely true of other university disciplines, and probably even more true for high-school and elementary school teachers.

What does tenure do? It distorts people’s effort so that they face strong incentives early in their career (and presumably work very hard early on as a consequence) and very weak incentives forever after (and presumably work much less hard on average as a consequence).

One could imagine some models in which this incentive structure makes sense. For instance, if one needs to learn a lot of information to become competent, but once one has the knowledge it does not fade and effort is not very important. That model may be a good description of learning to ride a bike, but it is a terrible model of academics.

From a social standpoint, it seems like a bad idea to make incentives so weak after tenure. Schools get stuck with employees who are doing nothing (at least not doing what they are presumably being paid to do). It also is probably a bad idea to give such strong incentives pre-tenure — even without tenure young faculty have lots of reasons to work hard to build a good career.

The idea that tenure protects scholars who are doing politically unpopular work strikes me as ludicrous. While I can imagine a situation where this issue might rarely arise, I am hard pressed to think of actual cases where it has been relevant. Tenure does an outstanding job of protecting scholars who do no work or terrible work, but is there anything in economics which is high quality but so controversial it would lead to a scholar being fired? Anyway, that is what markets are for. If one institution fires an academic primarily because they don’t like his or her politics or approach, there will be other schools happy to make the hire. There are, for instance, cases in recent years in economics where scholars have made up data, embezzled funds, etc. but still have found good jobs afterwards.

One hidden benefit of tenure is that it works as a commitment device to get departments to fire mediocre people. The cost of not firing at a tenure review is higher with tenure in place than it is without it. If it is painful to fire people, without tenure the path of least resistance may be to always say you will fire the person the next year, but never do it.

Imagine a setting where you care about performance (e.g. a professional football team, or a currency trader). You wouldn’t think of granting tenure. So why do it in academics?

The best case scenario would be if all schools could coordinate on dumping tenure simultaneously. Maybe departments would give the deadwood a year or two to prove they deserved a slot before firing them. Some non-producers would leave or be fired. The rest of the tenure-age economists would start working harder. My guess is that salaries and job mobility would not change that much.

Absent all schools moving together to get rid of tenure, what if one school chose to unilaterally revoke tenure. It seems to me that it might work out just fine for that school. It would have to pay the faculty a little extra to stay in a department without an insurance policy in the form of tenure. Importantly, though, the value of tenure is inversely related to how good you are. If you are way over the bar, you face almost no risk if tenure is abolished. So the really good people would require very small salary increases to compensate for no tenure, whereas the really bad, unproductive economists would need a much bigger subsidy to remain in a department with tenure gone. This works out fantastically well for the university because all the bad people end up leaving, the good people stay, and other good people from different institutions want to come to take advantage of the salary increase at the tenure-less school. If the U of C told me that they were going to revoke my tenure, but add $15,000 to my salary, I would be happy to take that trade. I’m sure many others would as well. By dumping one unproductive, previously tenured faculty member, the University could compensate ten others with the savings.

It must not be that simple because few schools have tried, and my sense is that those that took a stab at it capitulated quickly and reinstated tenure. What am I missing?