This is a personal note for a friend. Read it when you get turned down for tenure.
I was an Assistant Professor at Northwestern, came up for tenure according to schedule and was denied. Fired. Canned. Sent packing. It sucked.
But actually it wasn’t so bad. First of all even if you never get tenure anywhere you have like the greatest job ever. I live in a neighborhood full of people who earn 10 times what I do and they are all 10 times less happy than me. I once asked an investment banker whose daughter is in my daughter’s class how much of his salary he would sacrifice for the non-pecuniary benefits of an academic (doing whatever interests you, freedom to set your own schedule, university culture) and the best estimate we could come up with is that being an investment banker sucks big time.
But you will get tenure somewhere. Some places will want to put you on a fresh, probably shortened clock, you could go for that. But the other option is to ride out your lame-duck year. Universities are civilized enough to give you over one year notice before you are out on your ass. All the papers that have been in journal review purgatory will finally get published in that year and in the next year you will probably have a tenured offer.
It does kinda suck though to be dead man walking for a whole year surrounded by your executioners.
But the joke is going to be on them once you get tenured because here’s a little secret that only you, I, and our chairmen know: when you are finally tenured you will be making more money than most of them. Here’s a simple model. Professor A is employed by Department B and Departments C and D are considering making A an offer. Whatever they offer, Department B is going to match it, and you with your lexicographic preference of money first, avoid-the-hassle-of-moving second, will stay at department B. Since it’s costly to recruit you and make you an offer and that won’t be accepted in equilibrium anyway, Departments C and D don’t bother, B has no offer to match, and A, despite his new higher rank continues to live in Assistant Professor poverty. On the other hand when A is exogenously separated from B, he has a credible commitment to take the highest offer from C or D.
Failure rules.
(I must caution you however. As with any rejection, at first you will not be able to shake the hope that your current department will eventually see the error of its ways and hire you back after one year with tenure, Full Professor even. Don’t get your hopes up. That never happens.)
Drawing: Part of Your World from http://www.f1me.net
Cheap Talk 
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April 10, 2012 at 2:56 am
Lones Smith
Fortunately, senior offers are often accepted, and thus they keep coming. I know a former assistant professor from MIT who has accepted two of three tenured offers that he was given in his life.
Interestingly, some departments — like Wisconsin and Rochester — hold down the cost of making senior offers by delaying the serious vetting procedure until after the offer is accepted.
About your conclusion: Aren’t fairy tales fun when they come true? ^_^
April 10, 2012 at 7:50 am
Why not getting tenure is good « Nation of Beancounters
[…] Jeff at Cheap Talk: I was an Assistant Professor at Northwestern, came up for tenure according to schedule and was […]
April 10, 2012 at 12:11 pm
DRDR
You don’t need lexicographical preferences to make this model work. The intuition is similar to a more conventional IO model where the incumbent firm has a cost advantage and potential entrants need to pay a fixed cost to enter. In such a case, the incumbent firm captures the surplus initially if the fixed cost is large enough to deter entry, but the consumer captures more surplus if the incumbent disappears and the entrants compete.
Suppose B, C, and D all have the same willingness to pay W for your services in excess of their outside options, and you value staying at B by a value b more than going to C or D. As before, C and D have to pay some cost to enter the market for your services. Then if C and/or D entered, then B will always win the competition for your services by paying more than W-b, so neither C or D will recruit you. Then A is stuck at B with total surplus b in excess of the outside option’s salary. When B exogenously fires you, then C&D are willing to engage in a bidding war for your services. Assume C&D can collude enough to recover their recruiting costs in expectation (otherwise C&D engage in such a tough recruiting competition that it never makes any sense to recruit), but A still gets some amount of the surplus W > b from the bidding war, so that A ultimately benefits from the exogenous separation.
April 11, 2012 at 11:33 pm
Larry Blume
Didn’t Sandy Grossman once write a paper whose essence was, if an asset is to be priced correctly, it must actually be traded every now and then?