Enrollment and degree completion in higher education without admission standards

Many countries organize their higher education system with limited or no ex ante admission standards. They instead rely more heavily on an ex post selection mechanism, based on the students' performance during higher education. We analyze how a system with ex post selection affects initial enrollment and final degree completion, using a rich dataset for Belgium (region of Flanders). We develop a dynamic discrete choice model of college/university and major choice, where the outcome of the enrollment decision is uncertain. Upon observing past performance, students may decide to continue, reorient to another major, or drop out. We find that ex post student selection is very strong: less than half of the students successfully complete their course work in the first year. Unsuccessful students mainly switch from university to college majors, or from college majors to drop-out. We use the estimates of our model to evaluate the effects of alternative, ex ante admission policies. We find that a suitably designed ex ante screening system (with moderate admission thresholds) can considerably increase degree completion in higher education. A discriminatory screening system for universities only, can raise total degree completion even more, though it implies a shift from university to college degrees.