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

Author

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  • Brandén, Gunnar

    (Karolinska Institutet, and Center for Epidemiology and Social medicine (CES))

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.

Suggested Citation

  • Brandén, Gunnar, 2022. "Replacing student grants with loans. Evidence from a Swedish policy reform," Working Paper Series 2022:7, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  • Handle: RePEc:hhs:ifauwp:2022_007
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    References listed on IDEAS

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    More about this item

    Keywords

    Student aid; Adult education; Difference-in-differences; Propensity scores;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General

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