Selective Admission Tests and Students' Performances. Evidence from a Natural Experiment in a Large Italian University

Using a difference-in-differences approach, we exploit a quasi-experiment occurred in a large public university located in Southern Italy, to study whether the introduction of a selective admission test affects two indicators of students’ performances: dropout rate and grade point average (GPA). Our analysis shows that a change of regime to a more restrictive admission policy improves college performances, reducing the dropout rate of first year students by about 11% and increasing their grade point average by 1.2 points. Estimates are robust to various sensitivity analysis. Compared to other studies performed within the same national system, our analysis shows that a change of regime in selective admission policies have dramatically different effects in public versus private universities. We conclude that, in the realm of tertiary education, test based admission policies are effective where they are less used, i.e. in public universities.