Do means-tested tuition fees affect the cognitive and academic performance of students?
Description
Tuition fees of business schools typically represent an important financial burden for students and their families. Could this financial strain impair the cognitive functions of students from more disadvantaged backgrounds, and in turn their academic performance? We address this question by analysing the impact of the introduction of means-tested tuition fees for first-year students at a French business school. Using cognitive measures, we find that the difference in the performance at a Raven’s matrices test between economically disadvantaged first-year students, who obtained a fees reduction, and their counterpart in later-years, who paid the full fees, is significantly improved (more positive) in favour of the former, compared to the difference between first and later-year students overall. We find no such effect on the other cognitive measures (i.e. Stroop task and Cognitive Reflection Test) nor on a synthetic measure based on the three cognitive tasks. At the intensive margin, the increase with poverty levels of the fees’ spread between beneficiaries and non-beneficiaries does not accentuate the positive effect on the performance to the Raven’s matrices test, but it does so on the synthetic measure. This suggests a more broad-based positive cognitive effect of the program for the most economically disadvantaged. At the academic level, using administrative data, we found no total effect of the reduced tuition fees on the average grade of students, but mediation analyses demonstrate a positive indirect effect through improved cognitive abilities, at both the extensive and the intensive margins.
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