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Using a difference-in-differences approach, we exploit a quasi experiment occurred in a large public university located in southern Italy to examine whether the introduction of a selective admission test affects students’ performances. Our analysis on this unique data set shows that a change of regime to a restrictive admission policy reduces the drop-out rate of first-year students by about 14 percentage points, increasing their grade point average (GPA) by 0.78 point. In addition to the increase in average quality of admitted students, our results suggest that positive effects of an admission policy change largely operate through the impact of a better quality of social interactions at class level on the average individual performances. Results are robust to several checks. Compared with other studies using a similar approach, our own provides evidence that selective admission policies can induce different educational outcomes in diverse geographic areas of the same national system of higher education.