Reform welfare schemes to achieve economic and social objectives: the students' stipend scheme

Abstract

The Maltese government has been aiming to achieve two objectives in the context of social welfare policy reform. One is to emphasise more the principle of self-help, and the other is to enhance sustainable welfare support in the long run. The stipend reform was introduced with the intention of achieving the above-mentioned objectives. The new scheme began to operate upon students enrolled in post-secondary and tertiary institutions in the academic year 2005/2006. The increasing participation rate of students in the higher levels of education was mainly the result of the provision of a universal students' maintenance grant, which is expected to contribute to the further increase in the student population in the years to come. Being a crucial element for Malta's service based economy, education should be further supported to achieve the goals listed in the Lisbon Agenda. As a result, the expenditure on student financing and the financial burden on the state is also expected to increase. Thus, with the aim of reaching both the social and economic objectives, a policy tool that is considered to be sustainable from the equity and efficiency point of view should be implemented. The dissertation evaluates the merits of the stipend scheme in place and suggests how the weaknesses can be corrected. While the government should continue to provide free education for all, a revision in the form and level of government intervention is needed. The aim being that of contributing to the decrease in the state's financial burden and budget deficit together with other reforms taking place in the various sectors of the economy. The objective of building locally an adequate human capital stock also entails the government to operate the system of financing education in a way that the most in need are given stronger support. Consequently, the financing of the lower levels of education requires revision.