Do Students Perform Better if University Costs More?

Event Date: 29 March 2017

Speaker: Sefi Roth, London School of Economics

Time: 4.15pm

Venue: Stenhouse Wing SW104 

Abstract: How do higher fees affect the effort and performance of university students? We evaluate this hypothesis using detailed student data from a major research university in the U.K. We exploit an exogenous variation in the fee regime to carry out a difference-in-difference analysis as fees paid by domestic students in England tripled in 2012, while those paid by overseas students remained at almost the same (higher) level. We find that overall, students received lower grades, were more likely to fail and less likely to obtain an upper second classification, which is considered to be a gateway to many lucrative jobs. When considered separately, first and second year marks were not affected, but third year marks were significantly worse for those affected by the fee rise. Using detailed data on library usage we find that this pattern in performance is also evident in students’ effort as measured by book loans. One way to explain these results is that they need to pay back university loans and therefore start looking for a job is important and distracts students from academic activity.

Published: 29 March 2017