Econ Seminar: Andrea Ichino (European University Institute)

Andrea Ichino (European University Institute) 

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



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.