Tenure and Job Success

By Richard Vedder and Matthew Denhart

To most students we know, the "bottom line" of a college education is mainly: "Does it help me get a good job?" While a "good job" incorporates many dimensions, none is more important than salary -- people go to college largely to get good paying jobs after graduation.

We (CCAP) are in the finishing stretch of a complex but rewarding process of compiling rankings of schools to be used by Forbes in the construction of the Forbes Best College Rankings for 2009. In the process of doing the rankings, we conduct a lot of research, and one component of that research this year is a multiple regression model where we try to explain variations between colleges in the average salary of graduates with 10 to 19 years of post-graduate work experience. For the 560 schools observed, the mean salary was $74,296.92. The data are taken from payscale.com, a marvelous tool for students to look at as they explore college choices (we excluded schools where payscale had fewer than five observations to use).

We used a variety of variables to explain variations. To cite one example, we observe that schools with a high proportion of students on Pell Grants tend to have graduates with lower salaries, a finding that might be very disturbing to those who view Pell Grants as a tool to promote equal economic opportunity (there are several possible reasons for this finding, but discussion of that will have to await another day).

One variable we used was the percentage of faculty that have tenure. We found a statistically significant negative relationship between post-graduate occupational financial success and the incidence of tenured faculty. Students studying at a university where no faculty are tenured will typically earn $5,815 more annually than at a school where all faculty are tenured. This is not a momentously large number but it is, as the lawyers say, material in magnitude. To be sure, the statistical model is not the last word, and further analysis might strengthen or weaken the observed finding. Nonetheless, we consider the result strong enough to report here.

Why might this be? Professors with tenure have complete job security and face less accountability. They do not feel that they have to please their students as much or help them in their quest for post-graduate employment. Some tenured faculty decide to teach courses of interest to themselves that have no applicability to the real world, lowering the employability of their students. Some become so enamored of their research to the point that they treat students indifferently, not nurturing them outside the classroom, not to mention inside it.

These results improve the case for moving increasingly to alternative ways of protecting academic freedom among faculty and reducing rigidities in the academic labor market.