The (Adverse) Effects of Expanding Higher Education: Evidence from Italy

Over the period 1995–1998 Italy experienced an expansion of its higher education supply with the aim of reducing regional differences in educational attainment. This paper evaluates the effects of this policy by combining differences across provinces in the number of campuses constructed with differences across cohorts of secondary school leavers. A sequential model of educational choices with uncertainty is derived and estimated. Findings suggest that enrollment rose, particularly among middle ability individuals from less favorable backgrounds, as well as the probability of being retained in the university system. The decline in passed exams, especially experienced in Southern regions, casts doubts on the policy effectiveness in reducing regional disparities.