Tenure-track contract helps self-selection

Tenure-track contract is criticized for curbing the incentives to expend effort after obtaining tenured status. Yet the most productive faculties seem to work on a tenure contract, and schools which aim to employ the best faculty seem to prefer to offer tenure-track contracts to their new recruits. I argue that tenure-track contracts are by construction more attractive to more able freshly minted PhDs, and therefore the observed sorting is rationalizable.