Authors: Maria De Paola
Publish Date: 2010/05/15
Volume: 41, Issue: 2, Pages: 227-246
Abstract
In this article we investigate how heterogeneity in grading standards across university degree courses is related to supply and demand factors Using a sample of almost 26000 students enrolled at an Italian University we document how grades vary significantly across degrees After controlling for student characteristics classsize classmate quality and degree fixed effects it emerges that students obtain better grades and are less likely to dropout when their degree course experiences an excess of supply We adopt an instrumental variable strategy to account for endogeneity problems and instrument the excess of supply using the total number of universities offering each degree course Our twostage least squares TSLS estimates confirm that the teaching staff on degree courses facing low demand tend to set lower academic standards with the result that their students obtain better grades and have a lower probability of dropping out than they might otherwise Similar results are obtained using a control function approach
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