When students work more alongside their studies, some graduate later and some drop out. Skilled workers enter jobs matching their education later, which lowers tax revenue after several years.
Disputed assumption – may not work this way in reality
Economists disagree whether this effect works, and how strongly.
Research finds that working a lot during studies slows them down, but structural models found that the 2017 student aid cut lengthened study times only slightly. Work experience during studies can also improve later employment and pay, offsetting part of the effect.
Of every 100 euros that a change to “Student aid” saves or brings in, 20 € is lost as revenue on the line “Personal income tax”, starting after 3 yrs and building up to its full size over 8 yrs. (The other way round if the change adds spending or cuts taxes.)
Share of the change's own effect on the balance, year by year while the change continues: −15% means 15% of a saving comes back as cost (or 15% of extra revenue is lost). With the default values.
You can switch the effect on or off and adjust its assumptions in the simulator under Cause-and-effect chains.