Skip to content

The institution of tenure

Rohin Dhar writes:

The Priceonomics blog is doing a feature where we ask a few economists what they think of the the institution of tenure. If you’d be interested in participating, I’d love to get your response.

As an economist, what do you think of tenure? Should it be abolished / kept / modified?

My reply: Just to be clear, I’m assuming that when you say “tenure,” you’re talking about lifetime employment for college professors such as myself.

I’m actually a political scientist, not an economist. So rather than giving my opinion, I’ll say what I think an economist might say.

I think an economist could say one of two things:

Economist as anthropologist would say: Tenure is decided by independent institutions acting freely. If they choose to offer tenure, they will have good reasons, and it is not part of an economist’s job to second-guess individual decisions.

Economist as McKinsey consultant would say: Tenure can be evaluated based on a cost-benefit analysis. How much more would Columbia have to pay to attract professors if tenure were not on offer?

I have no idea, myself.

P.S. Here are a couple more thoughts from the last time we discussed this topic:

People sometimes think it’s surprising and wrong that high pay, good benefits, generous retirement, job security, and an easy workload go together. But from an economic point of view, this makes sense: all these can be considered as different forms of compensation.


Getting rid of tenure may solve some problems but I don’t know if it will help much with the slackers. After all, they already could’ve disciplined Rubinstein [a retired tenured prof who made a big splash by boasting of having beat the system by collecting a full salary while doing minimal scholarship and spending only an hour a week on class participation] by, for example, decreasing his salary and reducing his office space (perhaps appropriate giving his minimal contributions to teaching, research, and service), but I doubt they did that.

My guess is that universities might use lack of tenure to fire political nuisances and to lay off huge chunks of people for economic reasons. But I don’t see administrators effectively using lack of tenure using as a tool for getting rid of deadwood—given that they have some tools already that they don’t seem to use.

More generally, I don’t see tenure as being about “protecting deadwood” or for political freedom of expression. Rather, I see it as affecting the power balance between the employer and the employed. If your boss has the power to fire you or renew your contract, you’ll be under some pressure to keep your boss happy—and your boss will be aware of that.


  1. Hal says:

    You make good points. But the fact you don’t see tenure as being about political freedom of expression doesn’t mean it doesn’t doesn’t serve that important function in some cases.

    Here is an interesting case from UC Davis Med School (with a statistical dimension). A prostate cancer expert on the medical school faculty wrote an op-ed in a San Francisco paper criticizing his own medical school’s (profitable, arguably predatory) involvement in community PSA testing. So here we have someone taking the trouble to speak up on behalf of the public health and statistical rationality based on his professional expertise. The Dean of the medical school then took actions which sure looked like retaliation.

    If this guy lacked tenure, would he have had the nerve to speak up like this? I tend to doubt it.

    If he had lacked tenure, would the dean have gotten rid of him? Perhaps.

    It’s just a single case, but an interesting one. And perhaps inspiring for those of us who have tenure but rarely have the (rather minimal) courage needed to speak up in cases like this.

  2. Rahul says:

    “Economist as anthropologist would say: Tenure is decided by independent institutions acting freely. If they choose to offer tenure, they will have good reasons, and it is not part of an economist’s job to second-guess individual decisions.”

    I never understood this line of argument. If so, shouldn’t economists just retire because almost everyone is acting freely, so whatever happens must be right so why analyse at all? What’s the point behind analyzing policies, prices, collusion, cartels etc.?

  3. As an economist, I’d say that undertaking an academic career requires an extremely risky investment in human capital; we spend years learning things that university teachers and researchers in our particular subject areas need to know, but which are of more limited application in other settings; we do this in the face of uncertainty about whether there will be a career for us or not, or how long it will last.

    How to get people to invest in such skills? There are two basic mechanisms. One is to offer rewards for success – rewards large enough that their possibility compensates for the substantial chance of failure. The careers of professional athletes, actors, singers and so forth are typical examples. In labor economics it comes under the headings of superstars, and tournaments.

    The other mechanism is to offer insurance. This is a well known principle in the comparative (international) study of skill acquisition. I discuss it, and provide some references, here:
    The most common forms of insurance for these purposes are (1) unemployment benefits plus state-supported re-training, and (2) job security. The first of these is not much good for people faced with the premature termination of an academic career in the US – the unemployment benefit is too low and the state-supported re-training is non-existent, so the relevant form of insurance is job security.

    Academic tenure in the US actually is a hybrid of big reward, tournament or superstar style, and insurance in the form of job security: it is an insurance policy, but one that kicks in relatively late in the career: qualifying for the insurance policy (i.e., getting tenure) is also to win a big and long-delayed prize in the academic tournament.

    • Rahul says:

      I am skeptical about the risk aspect. Academic economists often jump ship to the Fed, think-tanks, startups, UN, World Bank, IMF, banks and many many other institutions.

      Ergo, I don’t think a good economist is in any way unemployable outside academia. The unemployable ones are less due to the nature of their skill-set and more the quality of it. In which case, tenure is not a great argument to protect them.

      I feel you are exaggerating the uniqueness of an academic career.

      “Whether there will be a career for us or not, or how long it will last” are fears almost everyone of us has to face, and none gets the luxury of tenure protection.

      • Anonymous says:

        We economists are lucky in this respect, and the institution of tenure is not specific to economists. When I say I’m writing as an economist, I mean that the analysis is in that vein – not that I’m writing about the job prospects of economists.

        • Rahul says:

          OTOH, my analysis applies not just to economists. Take statisticians. I bet Andrew is eminently employable in tons of other non-professorial settings.

          Engineers, physicists, biologists, chemists, psychologists lots of professors have other non-tenure options.

          In essence, maybe your risk-criterion applies to some professors, but that cannot be an argument for broad tenure.

          • Tenure may be more a way to reduce the cost of hiring professors. Most likely economists jumping ship to industry make more money on average, similarly for statisticians, and many other areas, though certainly not all. Nevertheless, on average offering tenure may allow for universities to reduce the salaries they have to pay. In areas where grant funding is really necessary to do anything at all (bio labs, particle physics, things like that) tenure may offer little protection, as you still have the uncertainty of whether you get grants. It seems to me like in those fields, esp. biologiy we’re seeing far less elasticity of supply as tenured and tenure track professors jump ship from academia as NIH has steadily made funding more difficult.

  4. Darf Ferrara says:

    Hopefully Priconomics has read Armen Alchian’s paper “Private Property and the Relative Cost of Tenure”, a classic paper on the nature of tenure.

  5. Steve Sailer says:

    Tenured professors are politically correct enough, as it is. I can’t imagine how boring intellectual life would be if every professor in the country was in constant fear of being fired for Noticing Things.

  6. Bruce McCullough says:

    Let’s correct a misconception. Tenure is NOT lifetime employment. Professors who do not keep themselves professionally fit (i.e., stop publishing, become deadwood) are NOT exempt from being fired. As Amacher and Miners show in their short, excellent book, almost without excepton, every time a university has fired deadwood, the courts have upheld the firing. The problem is that gutless administrators refuse to fire the deadwood, and that problem can be laid at the feet of the trustees.

    Academic freedom is narrowly circumscribed and is essentially limited to the professor’s discipline. A philosophy professor does not have academic freedom when he opines on economics.

    Finally, the primary reason for tenure is to ensure quality. The dean doesn’t have the expertise to hire in each field. Only the specialists in a field are qualified to assess the candidates. How many professors are willing to hire some young superstar who might take his job? Not many. If the person I hire can take my job, I have an incentive to hire only persons who are not a threat to my paycheck. Eliminate tenure, and the quality of the faculty will plummet.

    • Fred says:

      This is a very perceptive observation. Kudos.

    • Entsophy says:

      “If the person I hire can take my job, I have an incentive to hire only persons who are not a threat to my paycheck. Eliminate tenure, and the quality of the faculty will plummet”

      I read you as saying academics need artificial job security because they’re insecure losers who will act like world class douchbags otherwise. If so, I think you’re probably right. It’s a mystery though how anyone with talent ever gets a job in that part of the universe where there’s no tenure.

      That’s almost as big a mystery as how factory workers with high school degrees can find the courage to exercise their “freedom of expression”, but whimpering Ivy League graduates need tenure before doing the same.

      • Nathan Goldblum says:

        Nobody pays attention to what factory workers say, that is the difference.

        • Entsophy says:

          Right. So when a factory worker with a family risks their job to blow the whistle on illegal activities, that requires no courage because high school graduates are unimportant peons, but since the whole world is hanging on every inane word pompous university professors spout, it takes real courage for them to enlighten the world with their asininity.

          That’s one possible explanation. Another is that academia is welfare for small men who like to think they’re something special.

          We should go back to the days when professors were paid directly by students for each class and had no income from the university. Sure, we’d have to listen to endless whining from some of the most privileged people on the planet about how unfair it is that they have to make a real living just like the stupid people do, but other than that, it would solve pretty much every other problem with Universities in one swoop.

          • Bruce McCullough says:

            Whistleblowing is a false analogy. What can cause you to lose your job is not the issue. It’s how to do the hiring. See the difference? Any supervisor can hire factory workers. The dean of a college is not capable of hiring for all departments, and often is not capable of hiring in his own department (having been out of research for some number of years).

            With tenure in place, there is an incentive to hire the highest quality applicant, and the existing members (having been hired by such a process) are (usually) of high quality. Without tenure, there is an incentive to hire low quality applicants. If you want academic departments that produce high quality research, offer tenure. If you want departments staffed by persons incapable of doing research and barely capable of teaching mediocre classes, don’t offer tenure. It’s that simple.

            • K? O'Rourke says:

              Bruce: I am not convinced.

              As one tenured fellow said to audience of mostly tenured folks, the only thing you need to worry about in a university is if someone else there does the same thing as you. Otherwise you are fine!

              Most on a hiring committee will realize it’s in their interest to try to obtain someone they would want as a (junior?) colleague – and that would be someone who does something complementary very well (now of expectedly to in the future) not the same thing potentially better! Most in academe have big egos – that is definitely why I was there – otherwise it’s not worth it. So entsophys “small men who like to think they’re something special” has face validity for me (but in no way negative _if_ they contribute).

              I once found out I was hired because the committee thought I was mistaken about an approach I was taking (and presented as part of the interview process) and believed after I was there they could point out the errors of my ways and they could get me to implement their approach using time and skills they lacked. When I was informed of this (along with a meek you weren’t actually wrong after all) they still pressured me to implement their approach (even though my approach had shown theirs as inferior but not impossible.)

            • Rahul says:


              Your argument doesn’t convince me at all. Forget factory workers. Say, I’m heading a team of design engineers, or financial analysts or some such industrial function.

              Almost always, I’ve a say in hiring as Head of that Dept. Often, an incoming star can outshine me and be a threat.

              I don’t see industry needing tenure to fight this conflict of interest?!

              • Andreas Baumann says:

                In my professional job, I don’t have tenure, but I have a generous severance package. Tenure is one way of constructing the wage package, and for historical reasons it was the one adopted in the academy. It can be abolished, and perhaps that’s the way things are going, but that is going to take an extension of severance packages.

              • Bruce McCullough says:

                Ask yourself, who is qualified to do the hiring? There may be more than one way (other than tenure) to solve the agency problem in academia, but I haven’t heard of it.

      • jrkrideau says:

        I believe it is called a “union” :)

  7. Jim Manzi says:


    I think that a key point missing from the hypothetical statement by an economist as anthropologist is that the ability to offer tenure is a product of state power. That is, the money that ultimately pays for it comes in part form taxes and government-subsidized student loans. There is an endless argument about the requirements of state intervention to support all markets (police, roads, etc.), and also that in theory the broader society gains externality benefits from some kinds of higher education — but vis-a-vis the normal standards of reference for the economics profession, the education subsidies I indicated represent a departure from the requirements for a “well, this is what the market bid prices to” perspective.

Leave a Reply