Why schools do not hire their own graduates

Most graduate programs (with the exception of such schools as Harvard) do not hire their own PhD graduates as tenure-track professors. A common justification of this unofficial rule is that schools want to prevent "academic inbreeding". Gathering people with different academic backgrounds in one department, they argue, is likely to produce better synergies. Another justification of this unofficial rule is that a newly minted assistant professor will always be perceived as a "dumb PhD student" by other faculty members if he continues working for the same department he got his or her PhD from.

One can argue that this noble purpose of creating better synergies and improving well-being of newly minted professors is really a mask for some much more earthly and pragmatic causes.

First, by the time someone gets his or her PhD degree he may have a lot of hate towards professors in the department and simply may not want to continue working with them. I rarely meet a PhD graduate who doesn't hate his or her committee members and the department as a whole.

Second, given the scarcity of tenure-track positions, a second-tier school can easily hire someone from a top-tier school as a tenure-track faculty member. So there's no point in hiring their own graduates when they can easily hire someone much shinier.