Lifetime Employment

Tenure is the ultimate insurance. College professors with tenure are guaranteed a job for life.^[7] Tenure functions as insurance because if something bad happens to the professor’s career (for example, he stops publishing and becomes a terrible teacher), he still gets to keep his job. Other types of employees, such as U.S. government workers, effectively have tenure as they are almost impossible to fire. Lifetime tenure creates two problems. First, it decreases the incentives of those with tenure to work hard. The second problem manifests from adverse selection. The type of person most attracted to a job with lifetime tenure would be someone who suspected that she would need protection from getting fired because her job performance might not always merit continued employment.

^[7]Professors can still be fired for gross misconduct such as sexual harassment.