Why tenure?

Cater, Bruce and Lew, Byron and Pivato, Marcus (2009): Why tenure?

Abstract

Academic research is a public good whose production is supported by the tuition-paying students that a faculty's research accomplishments attract. A professor's spot contribution to the university's revenues thus depends not on her spot research production, but rather on her cumulative research record. We show that a profit-maximizing university will apply a `high' minimum retention standard to the production of a junior professor who has no record of past research, but a `zero' retention standard to the spot production of a more senior professor whose background includes accomplishments sufficient to have cleared the `high' probationary hurdle.

• Item Type: MPRA Paper
• Language: English
• Keywords: academic tenure; labour contract; up-or-out
• Subjects: J - Labor and Demographic Economics > J4 - Particular Labor Markets > J41 - Labor Contracts; J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure ; Wage Differentials

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