Andrea Ichino (European University Institute)
For many students throughout the world time to obtain an academi degree extends beyond the normal completion time, while college tuition
is essentially constant during the years of enrollment and in particular does not increase when a student remains in a program after its
regular end. Using a Regression Discontinuity Design on data from
Bocconi University in Italy, this paper shows that if tuition, in the last year of the program is raised by 1000 Euros, the probability of late graduation decreases by 6.1 percentage points with respect to a benchmark average probability of 80%. We conclude showing that
an upward sloping tuition profile may be efficient when effort is suboptimally
supplied in the presence of peer effects.