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College Cost and Time to Complete a Degree: Evidence from Tuition Discontinuities

  • Pietro Garibaldi
  • Francesco Giavazzi
  • Andrea Ichino
  • Enrico Rettore

For many students throughout the world the time to obtain an academic degree extends beyond the normal completion time while college tuition is typically constant during the years of enrollment. In particular, it does not increase when a student remains in a program beyond the normal completion time. Using a Regression Discontinuity Design on data from Bocconi University in Italy, this paper shows that a tuition increase of 1,000 euro in the last year of studies would reduce the probability of late graduation by 6.1 percentage points with respect to a benchmark average probability of 80%. We conclude suggesting that an upward sloping tuition profile is efficient in situations in which effort is suboptimally supplied, for instance in the presence of public subsidies to education, congestion externalities and/or peer effects.

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Paper provided by Collegio Carlo Alberto in its series Carlo Alberto Notebooks with number 38.

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Length: 60 pages
Date of creation: 2007
Date of revision:
Handle: RePEc:cca:wpaper:38
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