Education providers’ take-up of government grants: Evidence from a grant allocation discontinuity

Olof Rosenqvist () and Jan Sauermann
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Olof Rosenqvist: IFAU - Institute for Evaluation of Labour Market and Education Policy, Postal: Institute for Evaluation of Labour Market and Education Policy, P O Box 513, SE-751 20 Uppsala, Sweden

No 2026:23, Working Paper Series from IFAU - Institute for Evaluation of Labour Market and Education Policy

Abstract: In decentralized school systems where core funding comes from local governments, education providers can sometimes be entitled to central government grants on top of the core funding (e.g. Title I in the US). In Sweden, government grants that public and private education providers can claim have grown over time; from around 3 % of compulsory school costs in 2010 to 7 % in 2023. The grants, which typically are tied to specific purposes, are a way for the government to exercise control over various school policies in a decentralized system. However, for the grants to have an impact, the providers must claim their entitlements which requires submitting a detailed plan for fund usage and not all providers do this, especially not smaller private providers. We study how the size of the grant entitlement affects providers’ take-up decisions. This is a margin that readily can be adjusted by e.g. merging smaller grants to a single larger. We exploit variation from a large grant in Sweden that allocated substantially more money to providers with a socioeconomic student composition below a certain threshold value. Using a regression discontinuity design, we find that take-up among private providers increased from 70 % to 88 % as the grant amount increased from about 4 % to 13 % of the total cost per student. Importantly, the effect on take-up appears to be sticky as it remains in a later year when the compensatory part was removed from the grant and all providers were entitled to the same amount per student.

Keywords: Education provider; government grants; take-up; grant size; discontinuity (search for similar items in EconPapers)
JEL-codes: H81 I22 I28 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2026-10-12
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