The effects of an education-leave program on educational attainment and labor-market outcomes

Abstract

I study the effect of an education-leave subsidy for the employed on labor-market outcomes and educational attainment using Finnish administrative linked employer-employee panel data and matching methods. The adult education allowance is available to employees with at least eight years of work experience and allows them to take a leave for 2–18 months to participate in an education program. I find large positive treatment effects on educational attainment and changing occupation. The treatment effects on earnings and employment are negative during the lock-in period and close to zero afterward. The effects are more positive for the less educated.