Everybody who has ever worked in an academic environment has complained about academic deadwood: tenured professors who do not contribute to research and often do not contribute much to anything else as well. The tenure system is often blamed, as it makes it very difficult to fire someone for underperforming. But even if there is an incentive structure, like merit increases in pay, they clearly have less bite for old faculty who will benefit from them for a shorter time.
I have always been on the lookout for a solution to this academic deadwood problem, thus when I stumbled upon this paper by Yu-Fu Chen and Gylfi Zoega, I was very hopeful. They draw a life-cycle model with unobservable research effort, while administration and teaching are observable. The paper comes to the conclusion that only the senior professors who enjoy research will do any, and thus heterogeneity in research keeps increasing with age. Nothing new here. Where a model becomes really useful is with policy prescriptions: how could the incentive structure be changed? Is is better not to have a tenure system? But none of that. How disappointing.
Here is my take at it, but without the benefit of having worked out a structural model. 1) Tenure needs to be weakened. While it was instituted to preserve academic freedom when research could not be evaluated, we have now plenty of metrics fro research performance. Doing poorly on those should be punishable. 2) Merit raises for good performance need to increase with age to counter the fact that older faculty benefit from them for a shorter time. 3) There needs to be much more flexibility and heterogeneity in teaching loads for senior faculty, so as to balance total effort.