Steven Levitt on Getting Rid of Tenure

teacher1a.jpgOver at Freakonomics Blog, Steven Levitt argues that tenure should be abolished:

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). . . .

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 leave 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. . . .

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?

Although I agree with a lot of what Levitt says, I wonder how feasible a non-tenure system would be. If the decision whether to fire a professor were left up to the dean, this would provide far too much power to the dean, especially for institutions like law schools that are mostly run democratically by faculty vote. Another model would be for professors to be fired based on a special vote by the faculty made at a faculty meeting after some kind of review process every 5 or so years. Such a system, however, would create a lot of tension and strife among the faculty. Tenure denials are one of the most contentious and divisive things for a faculty. Creating more tenure strife might poison the school’s atmosphere and add institutional drama that distracts professors from their scholarship.

Moreover, Levitt’s argument seems to rest upon the assumption that faculty politics will be relatively rational. But that’s often far from the case. Perhaps he is right that there may not be a danger of being terminated for saying unpopular viewpoints. But the danger is in the petty things. Professors may be terminated because others don’t like what they say at faculty meetings or how they vote on hiring and tenure decisions. They may be terminated for petty interschool or interdepartmental politics.

All this said, however, there is a lot to be said for having some mechanism to ensure that faculty members remain productive. I’m not sure what the model should be, and I think that the existing tenure system doesn’t provide the best incentives in this regard. But I’m quite wary about abolishing tenure, as the cure might be worse than the disease.

Here’s more about what Levitt proposes:

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 unilateerally 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.

Is Levitt right? Should academic institutions abolish tenure?

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7 Responses

  1. Robert Rhee says:

    The argument that faculty could get fired for petty reasons seems to depend on the premise that an entire faculty can act irrationally. This could be the case, but I hope it wouldn’t be the norm. Deans may be able to coax more production by performance pay, reallocation of teaching and administrative responsibilities, paid research leaves, etc., though these influence only so much. Also, faculty has a large influence as well. If the faculty as a whole has a strong culture of scholarship, a non-producing member may feel uncomfortable in a situation where values do not align. This may prompt more production or a desire to leave. Rather than a dramatic move like getting rid of tenure or giving the dean unfettered discretion, the solution may be a mix of dean and faculty influence to create a culture of production and excellence. Obviously, this solution is difficult (as is the problem). In the business world, changing institutional culture is a painful process. Often, it is preceded by mass firings and layoffs, which I suppose supports Steve Levitts’s view to some extent, but culture can be changed through firm leadership and “buy-in” by the major constituencies. In my view, if an institution has a large segment of unproductive faculty members, the problem goes far deeper than the motivations of the individuals. The root of the problem probably is with the institution itself and its culture.

  2. I’m puzzled as to why Levitt thinks that “really good people” will demand only “very small salary increases” to compensate for the lack of tenure. Tenure is one of the main advantages that draws people into the academy who might otherwise make multiples of academic salaries in the private sector.

    Levitt’s argument (which is rather humdrum coming as it does from a genius) also ignores incentives and morale issues. Especially in the humanities, one only gets a tenure-track job by devoting six-to-ten years to a book-length project that qualifies one to teach at a university and nothing else. Take away tenure, and only the independently wealthy (and the wholly irrational) would remain in the pool.

  3. Eric Fink says:

    The Thatcher government abolished tenure for British universities in the mid-80s. Already-tenured faculty were “grandfathered”, but new hires don’t get tenure. I would imagine that there must be some research on the effects of that change on faculty recruitment, turnover, productivity and such.

  4. Such a system, however, would create a lot of tension and strife among the faculty. Tenure denials are one of the most contentious and divisive things for a faculty. Creating more tenure strife might poison the school’s atmosphere and add institutional drama that distracts professors from their scholarship.

    But one reason tenure denials are so contentious and divisive is because the stakes are so high. In the absence of tenure, the decision about whether to hire or fire would not be a decision about whether to offer lifetime employment; it would just be a routine employment decision.

  5. I don’t know if there has been any empirical research on the effect of the Thatcher government’s reforms on the English academy. I do remember that, back when I was teaching in a history department in the mid-1990s, I came across research on post-tenure productivity. The research indicated that, on average, scholarly productivity increased post-tenure. I don’t recall how productivity was measured, and one might in any case still argue that universities should have a mechanism for weeding out unproductive faculty members. Still, why not just gather information to establish that the tenure system is broken before we fix it?

  6. Robert Ahdieh says:

    I’ve long wondered whether a periodic faculty vote on continued appointment, with a heavily weighted super-majority requirement for dismissal (perhaps 4/5 of voting faculty members) would be harmful/dangerous in the ways you suggest. As best I can tell, it is quite rare for a faculty member to be an island completely unto her/himself. Everyone, at some level, has a gaggle of colleagues of which they’re part. This is important for retention purposes, as even if I hold a petty grudge against the faculty member up for review, I’m likely to have *some* relationship with *some* member of the clique of which she/he is part. Given that, I would be surprised if a 4/5 vote could be achieved without some substantial basis (i.e., unless the critique of the relevant faculty member were based on legitimate concerns with productivity – or similar substantive concerns). Add in that the system would be a repeat-play game, in which I too will come up for review, in one of a small number of upcoming cycles (and you might fiddle with the recurrence of review, depending on faculty size), my incentives to act on my personal peccadillos would seem to fall off even more dramatically.

  7. J.R. says:

    Yes, it should be abolished! Academic freedom will be protected. I work as a staff member at a middling, average state university. I was just chewed out by a horrific business professor for — horrors! — going to bat for a student.

    In my 3 1/2 years here, I’ve heard 100 percent negative comments from students towards this “teacher.” At any other profession she’d be fired for her rude, condescending attitude.

    She’s retained here. Why? Tenure.

    She’d have a tough time retaining a job in any other profession, but at a university she’s promoted through the system for publishing tracts in obscure journals that no one reads.