The effect of tuition fees on university graduation

This paper examines the impact of tuition fees on graduation rates among high-school leavers. We analyse the introduction of fees in several German states in 2006-07 (around EUR 1,000 annually), using administrative microdata on all university graduates and a difference-in-differences approach. The share of high-school leavers graduating fell by 1.8 percentage points, which is less than the 3.2-percentage point drop in enrolment, indicating many deterred students would not have graduated without fees. This underscores the importance of studying not only enrolment but also graduation rates, particularly in systems with high dropout rates and "ghost students"-students enrolling primarily for non-educational benefits.