The Swedish Agency for Public Management

Increased study grants for young unemployed people. An evaluation of the effects of the initiative (2015:13)

On commission by the government, the Swedish Agency for Public Management (Statskontoret) has evaluated the effects of the temporary investment in bigger grants through student finance for some young unemployed people. The initiative is directed at young people aged 20-24 who lack final school grades from compulsory or upper secondary school and who are enrolled in the Swedish Public Employment Service job guarantee for young people, or the job and development guarantee.

One in ten of the target group has taken part in the initiative

During the period 2011-2013, approximately 71,000 young people were in the target group for the initiative. Of these, about 6,300, equivalent to 9% of the target group, took advantage of the study grant initiative. Studies were carried out at compulsory school level or upper secondary level in municipal adult education (Komvux) or at a folk high school.

Women, people with well-educated parents and young people born in Sweden are over-represented among those who took part in the initiative. These are the same groups that tend to be more inclined to study in other contexts, too.

One-third recruited through the higher grant

The analysis by Statskontoret shows that for 36% of the young people concerned, the higher grant has had a decisive influence on the decision to resume their studies. There are relatively small differences in the recruiting effect (i.e. the significance of the higher grant in persuading young people to resume their studies) between different groups of students, although it is possible to discern a slightly larger recruiting effect among young people aged 23-24.

The results also show that 38% of the students would consider studying without any student finance at all. For this group, the higher grant level was not decisive for their decision to resume studies.

More choose to study in municipal adult education than at folk high schools

Most of those within the framework of the initiative have chosen to study in municipal adult education. However, the proportion who studied at folk high schools increased continuously during the period 2011-2013. A majority of the students took theoretical courses. This applies regardless of the type of education.

A small percentage of students complete their studies

The analysis by Statskontoret shows that a relatively small percentage of the students within the framework of the initiative actually completed their studies. Of those who studied at municipal adult education, 9% achieved their final grades. Among the students at folk high schools, 15% achieved basic eligibility for further studies.

One possible explanation for why so few achieved final grades from municipal adult education is that final grades are not a requirement to be eligible for further studies. The goal for many of the students is to continue to study at university or vocational college.

Many study for several years

One of the goals of the study grant initiative is to strengthen the position of young unemployed people on the labour market. The analysis by Statskontoret shows that among those who studied under the initiative in 2011, there were fewer registered at the Swedish Public Employment Agency two years later, compared to those in the target group who did not take part in the initiative. At the same time, the analysis shows that the employment rate was lower among those who studied in 2011 compared with those who did not take part in initiative. After two years there were more people employed among those who had not studied than among those who had chosen to take part in the study grant initiative. One of the explanations for this result may be that many of those who began studying in 2011 are still doing their studies. Our analyses show that it is common to study for many years.

Increased study guidance and occupational counselling can improve the impact of the reform

Statskontoret concludes that strengthening study guidance and occupational counselling could help to increase the impact of the reform. There are several reasons for this conclusion. About 30% of students stated that study guidance and occupational counselling were important in their decision to study. We also note that many young people have not received information about the possibility of studying with the larger grant.

The initiative may be cost-effective in the long term

During the period 2011-2013, the initiative cost approximately SEK 600 million. On average, each person recruited specifically by the larger grant has cost SEK 261,000.

This cost should be considered in relation to young people without compulsory school and upper secondary school having a significantly higher risk of unemployment and sick leave later in life, compared to those who have completed their studies. In this perspective, even costly initiatives targeted at unemployed young people without basic education can be worthwhile from a socioeconomic perspective.