Making college cheaper can actually backfire and make students study less for their entrance exams.
SSRN · March 17, 2026 · 6313778
The Takeaway
In competitive systems, students from wealthy backgrounds often view high tuition and intense study effort as substitutes. When subsidies make college more affordable, the pressure to 'earn' a spot through merit vanishes, leading to a significant drop in student preparation and exam scores.
From the abstract
In centralized college admissions systems, tuition differentiation influences not only application decisions but also students' incentives to invest in costly exam preparation prior to matching. This paper examines how tuition policies reshape pre-matching effort, equilibrium admission cutoffs, and welfare. Using administrative data and a nationally representative survey from the Turkish college admissions market, we document that students from higher socioeconomic backgrounds exert less prepara