Do Financial Conditions Play a Role in University Dropout? New Evidence from Administrative Data

Abstract

AbstractA large strand of research in the economics and sociology of education has highlighted the existence of deeply rooted inequalities in educational choices along socioeconomic lines, even when net of prior performance. These disparities may take different forms at different stages of schooling and across institutional systems. Yet, due to the lack of data, it is often difficult to disentangle the role played by the various dimensions of socioeconomic background on students’ educational careers. While parental education and occupation may shape aspirations (and thus the wish to undertake ambitious educational programmes), lack of income could represent a material obstacle to the continuation of study. In this chapter, we focus on the effect of financial conditions on the probability of dropping out from university. Italy is an interesting study case, because the education system is mainly public and university tuition fees are relatively low and income progressive. Because direct costs for disadvantaged students are low, we would expect income not to be highly relevant in this context. By exploiting a unique data set from the University of Torino (in northern Italy) linking administrative data from students’ university careers and information on parental characteristics collected at matriculation, we analyse how socioeconomic background influences the first-year dropout probability. While extremely relevant in earlier educational outcomes, parental education and occupation no longer exert a sizable effect at this point in students’ lives. Instead, we find that economic conditions greatly influence the chances of completing university. This result suggests that low tuition fees may be insufficient to foster the participation of low-income high school graduates and that additional forms of support might be needed to ensure equity and, at the same time, raise the share of young people with higher education degrees, which is still too low in Italy.