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Abolish Tenure, Says Levitt March 4, 2007

Posted by Johan in Off Topic.
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Stephen Levitt makes a strong case that academic tenure, i.e., the employment protection benefits that academics enjoy, needs to go. He is already getting his way, of course, as the tenure-to-academic ratio is on the decline. Some quotes from Levitt:

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).

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 leave to a scholar being fired?

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.

He has a point, of course. From an administrative point of view, it is preferable to use salary as an incentive, because it allows later manipulation if it is not having the desired effect. Once you’ve given someone tenure, you have nothing left to offer them. If there was a way to do an experiment, it seems likely that tenure-less departments would prove more productive.

Unfortunately, academics are in a crappy position to negotiate. More and more people go for Ph.D.s each year, and the funding situation gets worse and worse, as the postgrads I know keep telling me. The fact is that for a lot of people, research is the only career they can imagine doing, and they will put up with pretty much anything for a place in a department. This is why academics are so poorly paid, and it is also why tenure might well disappear without it being offset by any increases in salary, contrary to Levitt’s ideas.

The only thing that would change this trend is if the academic situation becomes so bad that the popularity of research degrees starts to drop.

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