Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/192696 
Year of Publication: 
2012
Series/Report no.: 
Discussion Papers No. 714
Publisher: 
Statistics Norway, Research Department, Oslo
Abstract: 
This paper investigates to which extent students in higher education respond to financial incentives by adjusting their study behavior. Students in Norway who completed certain graduate study programs between autumn 1990 and 1995 on stipulated time were entitled to a restitution of approximately 3,000 USD from the Norwegian State Educational Loan Fund. Comparing treated and untreated (control) programs in a difference-in-difference framework, we find that the average delay in the treatment group decreased by on average 0.8 semester during the reform period, and by 1.5 semesters in the following two years. Number of years treated matter strongly, with delays reduced by 0.23 semesters per year treated. Furthermore, there is some indication that it is important that treatment starts before the final part of the educational programs. The share of on-time graduation increases by 3.8 percentage points per year treated, from a pre-reform level of about 20 percent. Thus, a large share of the restitutions given will be for students who would otherwise not have graduated on time. A series of robustness checks indicate that our estimated effects do not reflect differential trends or omitted variables.
Subjects: 
Financial incentives
higher education
on-time graduation
semesters delayed
difference-in-difference
JEL: 
D01
H52
I22
I28
Document Type: 
Working Paper

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