This paper proposes a structural approach to the estimation of the effects of term limits. A structural approach also allows us to measure the welfare effects of different term limit lengths. We identify and quantify discipline and selection effects using U.S. gubernatorial elections data for 1950-2007. We find that the possibility of re-election provides a significant incentive for incumbents to exert effort. We also find a selection effect, though it is weaker in terms of its effect on average governor performance.