Universities as nail factories? An evaluation of the Italian public funding of higher education

We use data on graduates from public Italian universities and show that socio-economic factors, external to the control of the university management, can play a crucial role in determining the performance of students in terms of study completion time. We argue that the recent reform of the Italian public funding policy, which rewards universities for the number of students who complete their studies on time, can have perverse effects on the quality of undergraduate education.