The Economic Upside to Ending Tenure

June 19, 2011

In her new book, The Faculty Lounges: and Other Reasons Why You Won't Get the College Education You Paid For (Ivan R. Dee), Naomi Schaefer Riley argues that faculty tenure is among the factors contributing to the decline of higher education in the United States. Here is an excerpt from the book.

If colleges were to eliminate tenure tomorrow, they'd have to pay faculty higher salaries. That's what most economists—and common sense—will tell you. Lifetime job security is a perk, like health insurance or a company car. If you take it away, you'll have to compensate in another way to get the same quality of employees.

Tenure means not having to worry about having to find new employment in middle age, and that means a lot to professors. As the George Mason University economist Tyler Cowen explains, "In a lot of academia, once you're over 50 it's hard to get another job, even if you've done well." He compares it to being a computer programmer, where age seems to be a disadvantage no matter how talented you are. Taking an academic job without the promise of tenure is what Cowen calls "a massive risk." So there would have to be a lot of money on the front end to make up for it.

In the long term, though, the costs might even out. Higher education would have a more sensible-looking labor market, in which colleges could ensure that all the faculty members were pulling their weight. This is particularly important for small colleges, says Bruce Johnstone, who has served as president of Buffalo State College and a vice president at the University of Pennsylvania. Large universities, in his experience, "tend to have ways of cushioning the existing departmental configurations a bit better than community colleges or small private colleges." Johnstone, who has also been a trustee at a small, independent college, says smaller institutions "need to add and subtract programs much faster and therefore need to be freer of the constraints of tenure."

In areas of study that were not attracting many students, colleges could eliminate departments or form consortia with nearby counterparts so that none were paying the salaries of full tenured professors to teach handfuls of students. Colleges could spend much less money subsidizing the kind of trivial research and publication that have become the central focus of the tenure process, and instead spend more money to support good teaching.

They could also spend more of their salary budgets on younger faculty, bringing some fresh blood into the community. Shirley Tilghman, president of Princeton University, confesses that her biggest concern about the current economic downturn is that universities will miss out on recruiting a new generation of faculty. Tilghman, who in the past has expressed her reservations about tenure's disproportionately negative effects on women, says, "The thing that will have the longest-term negative impact on colleges and universities is if we can't figure out how to continue the careers of young people just coming out of grad school. With such a high percentage of the faculty coming from the boomer generation, she adds, "We have a demographic problem." She believes that it would be "devastating for universities if we go through a four- to five-year period of hiring freezes."

Without tenure, all faculty could be hired instead on five-year renewable contracts—perhaps shorter ones earlier in their career and longer ones later, after they have proven themselves. The greater flexibility provided by this system might allow colleges to use fewer adjunct professors, thereby improving the quality of the education that students receive. And professors might also be willing to give up some compensation in return for flexibility.

As Stephen Prothero, a professor of religion at Boston University, says, "It would be so much different if there were a free and open labor market. People wouldn't be stuck for life in all kinds of cities they don't want to live in." One reason that middle-aged people in academia have such a difficult time getting jobs is that there are almost no job openings, let alone senior job openings. People get tenure, and then they get "stuck."

Even if contracting for faculty might cost slightly more in the long term, many colleges would be willing to make the investment if they knew they weren't locked into paying for a particular position for the next four decades.

If a group of universities in the same tier decided together to eliminate tenure, the economic effects on any one of them might be minimal, particularly if they were at the top of the education food chain. Harvard wouldn't have to pay a professor any more to compete with Yale if Yale had eliminated tenure as well.

But if one university were to go out on a limb and eliminate tenure, it would surely have to pay significantly higher salaries when recruiting new professors. On the other hand, leaders on that campus might also find that low-quality faculty were more likely to jump ship, knowing that an end to their careers there might be close at hand. That university might have stumbled on a useful market signal—telling professors that they shouldn't come unless they are sure of their own talent and their own commitment to the university.

In at least one way, tenure as a perk is different from health insurance or a company car. The people most likely to have tenure are those who are least likely to need it. The star professors out there—Stanley Fish, Henry Louis Gates, Alan Dershowitz, and many that no one outside of academia has ever heard of—do not need tenure. They are lured from one university to the next by higher salaries, better jobs for their spouses, more-temperate climates, and other baubles. They operate in a market that looks much like the corporate world. Colleges continue to shell out more money for these professors because tenure never even enters into their calculations. But no one knows whether the kind of flexibility that has developed at the top of the higher-education ladder could be replicated lower down.

Ed Larson, a Pulitzer Prize-winning professor of history at Pepperdine University, who served as associate counsel for the House of Representatives Committee on Education and Labor, compares higher education to baseball. Getting rid of tenure, he says, is akin to introducing free agency into the major leagues. It brought a lot more flexibility to team managers and players, but it also made things much more expensive. Free agency in baseball came about when the reserve clause—which tied a player to a particular team even after his contract had been fulfilled—was thrown out by an arbitrator. Interestingly, the reserve clause, which smacks of academic tenure, was opposed by the players, who thought they could get a better deal as free agents. The "players" in academia haven't yet come around to that view of tenure.

Still, eliminating tenure could produce results we can't predict. "Tenure affects the very nature of higher education," says Larson. "Removing it would be like changing the pitching mound or the distance to the bases."

If removing tenure is unlikely to improve the bottom line at most colleges, why should we consider it now? After all, colleges are in dire financial straits. What they need is a plan for making education more affordable, not less so. If the net economic effect of tenure is unknown at best, and a financial disadvantage at worst, why should we encourage colleges to eliminate it?

For just the reason that Larson elucidates. Higher education is so broken right now that it's time to change the pitching mound and the distance to the bases—not to mention the strike zone and the number of players on each team.

Naomi Schaefer Riley is the author of God on the Quad and a blogger for The Chronicle. This material appears by permission of the publisher and is protected by copyright. All rights reserved.