35 Pages Posted: 23 May 2016 Last revised: 20 Oct 2016
Date Written: May 18, 2016
Using a sample of all academics that pass through top 50 economics and finance departments between 1996 and 2014, we study whether the granting of tenure leads faculty to pursue riskier ideas. We use the extreme tails of ex-post citations as our measure of risk and find that both the number of publications and the portion that are “home runs” peak at tenure and fall steadily for a decade thereafter. Similar patterns holds for elite (top 10) institutions, for faculty with longer tenure cycles, and for promotion to Full Professorship. We find the opposite pattern among poorly-cited publications: their numbers steadily rise after tenure. The decline in both the quantity and quality of publications points to tenure incentivizing less effort in publishing rather than more risk-taking.
Keywords: Tenure, Incentives, Contracting, Compensation, Publication
JEL Classification: J24, J33, J44, M12, M52
Suggested Citation: Suggested Citation
Brogaard, Jonathan and Engelberg, Joseph and Van Wesep, Edward Dickersin, Why Do We Tenure? Analysis of a Long Standing Risk-Based Explanation (May 18, 2016). 2nd Annual Financial Institutions, Regulation and Corporate Governance Conference. Available at SSRN: https://ssrn.com/abstract=2781693