Abstract
This paper empirically tests the extent to which public universities in the United States are potentially mismanaged. The focus rests with university managerial employment decisions regarding the continuing substitution of less costly non-tenure track teaching faculty for tenured and tenure track faculty and the extent to which those decisions affect student graduation success. Panel data covering ten academic years, 2004-05 through 2013-14 are employed using ordinary least squares and stochastic frontier analysis specifications. The latter provides tests of the inefficiency effects of managerial employment decisions and academic year estimates of technical efficiency. In both cases, the results provide statistically strong evidence that tenured faculty lead to increased student graduation success while increases in non-tenured faculty have negative effects on student graduation rates. The stochastic results provide strong evidence of efficiency gains due to tenured faculty and increased inefficiency arising from non-tenure track faculty employment. While universities appear to have managed efficiency gains as a possible result of the Great Recession, those gains quickly evaporated in both 2012 and 2013. Separate estimates for research vs. lower level comprehensive universities, indicate that the former maintain greater operating efficiencies. Given that public universities are being subject to new funding models that tie funding to the production of student success rates, the continuing non-tenure track employment substitution suggests that universities are potentially mismanaged in generating funding support for faculty employment and student success.Keywords: Tenure, non-tenure, faculty employment, stochastic frontier, university
Highlights
This paper investigates managerial decisions in American publicly funded universities as those decisions relate to the employment of tenured and tenure track faculty relative to non-tenure track faculty and the efficiency consequences of producing student graduation success
The employment composition of tenure track faculty are relatively weak among both research and comprehensive universities and that, is in keeping with the stochastic frontier analysis (SFA) efficiency results of Tables 3 and 4 whereby the tenure track inefficiency coefficients struggled to reach a reasonable level of statistical significance
The empirical results of this paper support the notion that the faculty tenure process present in U.S higher education leads to improvements in the graduation rates of students and increases the efficiency of universities in producing student success
Summary
This paper investigates managerial decisions in American publicly funded universities as those decisions relate to the employment of tenured and tenure track faculty relative to non-tenure track faculty and the efficiency consequences of producing student graduation success. If university administrative decisions continue to rest with cost cutting substitutions of the employment of non-tenure track faculty for tenured and tenure track faculty and the former negatively affect student success rates while funding models are increasingly tied to the production of student success, university administrative decision-making is apparently incongruent with successful managerial practices. An ordinary least squares (OLS) model is used at the outset and is followed by a stochastic frontier analysis (SFA) model The latter is employed to estimate the inefficiency effects of university managerial employment decisions and, in addition, generate efficiency estimates of university production of student graduation success rates. In both specifications, university administrative decisions are incorporated as related to contractual employment arrangements of tenured faculty, tenure track faculty, and non-tenure track faculty. The paper proceeds with a brief literature review followed by the empirical methodology, an overview of the panel data, a detailed analysis of the empirical results, and a summary with concluding remarks
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