Replacing student grants with loans. Evidence from a Swedish policy reform

Gunnar Brandén

No 2022:7, Working Paper Series from IFAU - Institute for Evaluation of Labour Market and Education Policy

Abstract: The Recruitment grant was a student aid policy that replaced the loans in the student aid system with grants for unemployed adults with low education. In this paper, I estimate the causal effects of repealing this policy on the educational attainment and subsequent labor market outcomes for the target population in a difference-in-differences framework. I find that the repeal reduced enrollment in adult education by 10 percent relative to the pre-repeal enrollment rate, and that the number of passed credits decreased by 29 percent. I also find that repeal increased unemployment by an average of 76 days over the eight-year follow-up, and decreased earnings by about 12,000 SEK ($1,300). Although there are substantial differences in these outcomes across subgroups, the repeal had significant adverse effects for the target population as a whole.

Keywords: Student aid; Adult education; Difference-in-differences; Propensity scores (search for similar items in EconPapers)
JEL-codes: D31 I24 J62 R00 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2022-04-20
New Economics Papers: this item is included in nep-eur and nep-lab
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:ifauwp:2022_007

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