At Austrian universities, many (young) researchers are employed on fixed-term contracts without a clearly specified path to tenure (a permanent position). Young researchers on such fixed-term contracts are rightly worried about their future and would, of course, love to get permanent contracts. Some time ago the Austrian minister for Education, Science, and Research publicly said that universities should consider giving tenure to a substantial number of researchers currently on fixed-term contracts. I don’t think that this is a good idea. To be more specific, I believe that there is a much better way of giving young researchers long-term career perspectives: The universities should offer more tenure-track positions, perhaps, as I have seen in the USA and my field of economics, even for researchers who have just finished their doctoral studies.

At first glance you might say that this is exactly what the minister said. Surely, there is not much difference between giving people fixed-term contracts and then giving some of them tenure after all and giving them tenure-track positions from the start. But there is a huge difference. The difference can be explained with two notions from economics: adverse selection and moral hazard.

Let me first explain the adverse selection problem. Put yourself in the shoes of a promising young researcher (somewhere in the world) who has just finished their PhD and is now looking for a job. They are looking through the job adverts and find two categories of jobs: fixed-term positions (without any apparent possibility of being tenured) and tenure-track positions. Which would they prefer? Of course, there are other considerations, such as salary, the quality and quantity of the group of researchers at this place, the location, and so on. But I would conjecture that for many, ceteris paribus as economists like to say, tenure-track beats fixed-term by a large margin. Considering this problem from the point of view of the university, this means that by offering fixed-term positions when others offer tenure-track positions, the university will probably, on average, not receive the best applicants for these jobs. If the university then ultimately and surprisingly gives tenure to some of the fixed-term employed researchers, the university is likely not giving the job to the best people they could have found if they had offered tenure-track positions to begin with. This is the adverse selection problem.

In addition, there is also the moral hazard problem. Now put yourself in the shoes of a (young) researcher employed in a fixed-term position who is told there may be a chance to get tenure after all. You would ask yourself and your boss(es) what you should do to improve your chances of this. I suspect that, without clearly pre-specified criteria for getting tenure, it is down to this (young) researcher’s boss to lobby the higher university authorities for the (young) researcher to get tenure. Would your boss use the same (unstated) criteria that a (universally, or at least within the university) agreed and publicly communicated tenure-track contract would specify? Not necessarily. I would conjecture that some bosses would favor pushing those young researchers who help their bosses rather than those who do great independent research. As a young researcher, hoping that your boss will lobby for you to get tenure, what would you do if this boss asks you to jump in to teach their class tomorrow or to replace them at a meeting and to keep notes for them? Well, you would probably do it. A pre-specified catalog of achievements and obligations necessary for getting tenure will, however, likely not have such items on their list. I have a strong feeling that many (young) researchers in fixed-term positions who hope to be given tenure after all, end up wasting valuable time on for them and for science on the whole irrelevant things.

In short, I have argued that giving tenure to researchers on non-tenure track positions entails an adverse selection problem and a moral hazard problem. The effect of this is that the university ultimately does not hire the best researchers they could have hired, and these researchers do lots of work that has little to do with excellent research per se.