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The primary objective of this paper is to determine whether tenure in comparison to non-tenure faculty employment is efficient in producing the academic success of university students. A stochastic production frontier is estimated for university graduation rates while the inefficiency specification includes measures of tenured, tenure-track, and non-tenure track faculty employment. Using panel data for U.S. doctoral and master level public universities, the evidence indicates that the employment status does matter and that increases in the pro- portion of tenured faculty employment lead to efficiency gains in graduation rates. Effects of tenure-track and non-tenure track faculty are somewhat mixed with non-tenure track employment being inefficient among doctoral universities but efficient in the less research intensive master level institutions. From a policy perspective, the findings suggest that university administrators might improve both student academic success and government appropriated funding by reversing the non-tenure track hiring trend and advancing tenure among the faculty ranks. However, improvements in the quality of data along with investigations into the effects pertaining to the growth of online instruction and e-education would be most desirable in providing additional tests.

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