Posted by Jeffrey Brown on Jun 25, 2012
Filed Under (Uncategorized)
Today’s Wall Street Journal carried a piece called “Should Tenure for College Professors Be Abolished?” It pitted two individuals with strongly held views against each other on the issue. As so often happens when people are advocating rather than analyzing, both sides selectively examined the issue.
In favor of abolishing tenure, the WSJ featured Naomi Schaefer Riley, a critic of the tenure system who appears to believe that teaching is the only worthwhile activity in which academics engage. It was a bit ironic for me to read this on a day in which I am sitting at an academic conference on consumer financial decision-making in Boulder, exchanging ideas with some of the nation’s top scholars from a diverse set of fields (including law, economics, marketing, psychology, law and public policy) regarding new research that is both widely read and enormously impactful in the real world. As but one example, the conference was kicked off yesterday by Shlomo Benartzi at UCLA, who reminded audience members how academic research led to a revolution in retirement policy in the U.S., improving the retirement security of millions of Americans by increasing participation and contribution rates to 401(k) plans by leveraging the insights of psychology and behavioral economics. Apparently, Ms. Riley does not believe that such activities add much value and that we academics should just stay on campus and teach.
Defending the tenure system was Dr. Cary Nelson, an English professor at my own academic institution (the University of Illinois) and President of the American Association of University Professors. Dr. Nelson seems to believe that tenure is “the ultimate quality check” and that academic freedom would crumble if people were not granted lifetime tenure. I am unaware of any compelling evidence supporting such claims, although I cannot refute them either.
As an economist, I think that both authors – neither of whom I found particularly persuasive – missed an obvious way to frame this issue. Namely, tenure is a form of insurance. And like any insurance, it has both positive and negative effects. Here are a few:
- Tenure reduces the cost of hiring faculty. Tenure – insurance against job loss – is highly valuable, and therefore substitutes for other forms of compensation. In a competitive labor market (and, contrary to what many non-academics believe, the market for faculty is extremely competitive), tenure means that institutions do not have to pay faculty as much in the form of cash or benefits. If we abolish tenure, the new market equilibrium would result in higher average salaries, thus further increasing the cost of education.
- Tenure creates moral hazard: Moral hazard is the well-established phenomenon that people behave differently when they have insurance than when they do not. Because tenure provides insurance against the loss of a job – in spite of Dr. Nelson’s protests to the contrary – tenure can have the effect of making some faculty members reduce effort.
To be clear, I honestly do not believe this reduction in effort is the case with the vast majority of the tenured faculty members that I know – in fact, most of us lament the fact that, post-tenure, our work hours and the demands on our time increase. Indeed, I think the selection effect is huge – gaining tenure is so difficult at the top institutions that the only people who make it are, by their nature, extremely driven individuals. Most of these people do not shut-down after tenure – it is simply not in their DNA. So, one way to view the tenure process is that it creates enormously strong incentives to excel for during the probationary, pre-tenure period (that typically lasts anywhere from 6-10 years). This is not all that different from many partnerships – law firms, accounting firms, etc. – that work their junior associates to the bone in exchange for eventually becoming a partner. I am not suggesting that partners have indefinite tenure, only that the incentive effects early in one’s career make untenured assistant professors some of the hardest working people I have ever met.
However, although it is the exception rather than the norm, all of us in the academy know members of the faculty – thankfully, far fewer in numbers than most non-academics imagine – that take advantage of their protected status by slacking. Their research productivity declines, they spend less time preparing for classes, and they are less engaged in their departments and professions. This “dead wood” – while not exceedingly common – is exceedingly costly when it occurs. Most of us in universities would love to rid ourselves of this problem.
I may be in a minority of faculty, but I would personally not mind having a conversation about abolishing tenure and replacing it with a system of, say, 5-year renewable contracts, but not for the naïve and misguided reasons that Ms. Riley states. Rather, I believe that for the highly productive among us, our salaries would increase and we would have an effective tool for eliminating the deadwood in our ranks.
Granted, the “tenure as insurance” framework is far from the only set of factors that ought to be considered. Some of the issues raised by Ms. Riley and Dr. Nelson – how tenure affects risk-taking, teaching quality, and so forth – are incredibly important considerations. It would just be nice to have some solid empirical evidence on the size and direction of these effects before taking a final stand on the issue. Until I see it, I am going to head back downstairs to the behavioral decision-making context to see some of the research that I honestly believe is going to help improve lives.