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
Jan Sauermann: IFAU

No 19086, IZA Discussion Papers from IZA Network @ LISER

Abstract: In decentralized school systems where core funding comes from local governments, the central government sometimes provides grants on top of the core funding (e.g. Title I in the US). In Sweden, such grants have grown from around 3 of compulsory school costs in 2010 to 7% in 2023. For the grants to have an impact, 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)
Date: 2026-11
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