Efficient tuition fees and examinations : A reply

In a recent paper, Gary-Bobo and Trannoy introduce a model to study tuition fees as a tool to select students, in presence of asymmetric and imperfect information on the candidates' capacities. One of their main results is that if the results of the entrance test results are public, then it can be socially efficient to abandon those tests. Tuition is then the only selection device. Following Bourdieu reference work on higher education, we consider that powerful sociologic mechanisms induce social reproduction. These effects must be taken into account to understand the behavior of potential candidates. In particular, candidates from lower social groups may underestimate their capacities. We introduce a richer model that includes two groups. The member of the first group observed a noisy unbiased signal of their own talent, whereas the second group members' signal suffers from a negative bias. As a result, we obtain that tuition fees do not lead to social optimum, because talented member of the second group discard them-selves. This effect gets only stronger as entrance tests are abandoned. Nevertheless, we do not recommend strong selecting tests, since the same sociologic mechanisms negatively biased the second group members' results. We advocate for variable tuition fees, adapted to the social origin of the students and their effective professional future.