The Economic Efficiency of Tenure 13 May 2015 By: Andrea Curtis At-will employment has become the norm in society as it leaves the ability to hire and fire at the sole discretion of the employer. This is true in almost every field except one -teaching- and specifically university professors. While some other fields have unions and other job security none is quite as organized and laid out as that of education. The “tenure track” has become the best job security around, yet the question remains, is it economically efficient for the employer? Universities are more monetary driven than ever before with sky rocking tuition and intense work to increase donations, but is that money going to better education or inefficient employees? The “tenure track” encourages hard work, but it does so with the belief that it will payoff and the results will be an easy long-term career. The issue with tenure is not that it sets clear goals. The issue comes once the goals have been reached and the motivation disintegrates over time. It is often argued tenure is necessary to allow professors to do unpopular research without fear of losing their jobs. The problem here is how unlikely this is to occur. Universities are striving to get ahead and those with the unusual opinion are being encouraged to spread their discoveries especially with the increase in technology. It is also argued the tenured professors oversee the hiring and firing of faculty; however, it is acceptable to elect a board of professors to do this, which will most likely consist of those that have been at the university for an extended time. These professors will know what it takes to keep up with the high demands, not just what it took to get where they are. Tenure is essentially a control on the market for employment as a professor. There is a cap on the number of hires and less turn around, thus other schools do not have the opportunity to hire a professor who was let go or chose to explore other options. Professors have no motivation to search elsewhere when they are ensured ultimate safety and a decently large paycheck. This leads to the same effects as market regulation with a ceiling being put on the demand as well as the external effects of ultimate job security. To get things going an increase in pay could lead some professors to forfeit their tenure. Those that are confident in their ability and the best in the field would likely be the first to step forward as they have nothing to lose. The mediocre tenured faculty are truly the ones who depend on tenure since it is likely the lesser employees have not been granted tenure or have not applied. The redistribution of payment would lead to an excess of cash that can be put back into the university or held as pay raises for those employees whose research and work within the university lead to well deserved payment. The increase in salary would be necessary to eliminate tenure one school at a time; however if it were a collective effort eliminating tenure would be simpler and even cheaper for universities. The excess cash would come from the money saved from lesser salary payments. Without tenure it is likely there will be more professors who stay for 3-6 years and receive small raises and starting salaries rather than a large number that stay 15-30 years and collect in excess. Job security is a positive for the employee and can be for the employer if it leads to employee loyalty; however, ultimate job security can only lead to mediocre performance. Motivation drives and yields success and without it the economic efficiency of universities will never reach its full potential.