The impact of student financial aid reforms on leaving home: Evidence from the Netherlands

Abstract

To save costs, young adults may delay leaving the parental home in times of welfare cuts. However, although the impact of student financial aid reforms on educational decisions has received considerable attention in previous research, the impact on leaving home has not previously been studied. Using register data, this study investigates how recent student aid reforms in the Netherlands have impacted students' home-leaving decisions. Event history models suggest that students who started studying after the reforms are substantially less likely to leave the parental home than students who began studying before the reforms. These findings underline the importance of the family for support: The family tends to take over when state support declines. The findings for income patterns are mixed. The decrease is greater for low-income students relative to middle-income students, whereas there is no difference in the effect of the reforms between low-income and high-income students.