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College cost and time to complete a degree: Evidence from tuition discontinuities

Number: 354
Year: 2009
Author(s): Pietro Garibaldi. Francesco Giavazzi, Andrea Ichino andEnrico Rettore
University tuition typically remains constant throughout years of enrollment while delayed degree completion is an increasing problem for many academic institutions around the world. Theory suggests that if continuation tuition were raised the probability of late graduation would be reduced. Using a Regression Discontinuity Design on data from Bocconi University in Italy, we show that an increase of 1,000 euro in continuation tuition reduces the probability of late graduation by 9.9 percentage points with respect to a benchmark average probability of 80%. We conclude suggesting that an upward sloping tuition profile would be desirable when effort is sub-optimally supplied, for instance in the presence of public subsidies to education, congestion externalities and/or peer effects.

Keywords: Tuition, Students Performance, Regression Discontinuity
JEL codes: I2, C31