Scandinavian Working Papers in Economics
Working Paper Series,
IFAU - Institute for Evaluation of Labour Market and Education Policy
No 2022:7: Replacing student grants with loans. Evidence from a Swedish policy reform.
Gunnar Brandén ()
Additional contact information
Gunnar Brandén: Karolinska Institutet, and Center for Epidemiology and Social medicine (CES), Postal: Karolinska Institutet, and Center for Epidemiology and Social medicine (CES), Stockholm, SLSO.
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
Language: English
36 pages, April 20, 2022
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