What if universities get rid of tenure?

Here's an NYT forum on the issue.  Here is a recent Megan McArdle blog post.  Traditionally I've been sympathetic to tenure (disclaimer: I have it), in part because the schools which have done away with it — the for-profits — have carved out a big niche but they have not displaced traditional non-profit, tenure-driven higher education in most fields.  Few parents dream of sending their kids there.  My point today is simply to note that tenure critics have yet to spell out what the alternative — and thus the debate — really looks like.

If you argue "abolish tenure" the real question is this: under what conditions will professors be fired?  For instance, if you abolish tenure but never fire a professor, the change is maybe not so large (though the threat to fire still can change equilibria).

Here's a thought experiment: take a 53-year-old professor, at a moderate quality university, who goes from publishing three articles a year to one article a year, and in somewhat lesser journals than before.  His teaching evaluations slip steadily, though he never becomes a disaster in the classroom.  In the no-tenure world, does that person get fired?  (And what's his chance of finding another job?)

If firing is in order, how much higher do initial wage offers have to be?  (Recall that you're asking the new hire to take a $$ wage lower than his human capital would otherwise indicate; btw Megan covers that query here.)  Is this deal worth it for universities?  If that guy doesn't get laid off, who does?  Only the convicted felons?

If you believe in abolishing tenure, and yet tenure won't go away, do you also think schools should cut entry-level wages for new professors, as a second-best means of lowering their total compensation?  How do you feel about the achievement paths of the schools that are already trying this strategy?  Will abolishing tenure involve any compensation scheme other than that already used by current for-profits in higher education?

With the pro-tenure arguments, you might wonder how higher education is supposed to differ from other sectors of the economy.  I believe it is this: given that higher education is in part about signaling and certification, socialization and networking of students, "warm glow" of the donors, and research superstars, the later-period shirking of the typical laggard doesn't hurt actual productivity nearly as much as the schools themselves might like to think. 

This also suggests that schools themselves will never make an intellectually convincing case for tenure, since they can't come out and admit that "in the longer run, most of us don't really matter, we only pretended our productivity was worth something in the first place."  Education as theatre, and all that; see my The Age of the Infovore.

When I hear answers to the above questions, namely what the alternative to tenure looks like, then the tenure debate will be getting somewhere.

To some extent the proposed gains from abolishing tenure can be reaped simply by increasing teaching load, relying more on on-line instruction and/or reintroducing mandatory retirement.