”Student finance for transition and retraining should go to those who need it most”

In October 2022, omställningsstudiestödet, the student finance for transition and retraining, was launched in Sweden to help people shift their careers in line with changes in the job market.

However, a new report for SNS reveals that the support is not working as intended. Lower-educated individuals or those at risk of losing their jobs, for example due to AI, apply for the support less often and are more frequently rejected. This results in an inefficient use of taxpayer money.

People who have been given notice of termination should be given priority, David Seim and Peter Fredriksson write in a Dagens Nyheter debate piece, pointing at the report’s three main findings about the student finance for transition and retraining:

1. The support does not reach those who need it most.
2. The support subsidises education that would have occurred anyway.
3. The size of the compensation influences the likelihood of applying.

David Seim and Peter Fredriksson further argue that by directing the support to those who need it most, taxpayer money can be used more effectively and help facilitate the job market’s transition.

About the report Who receives student finance for transition and retraining?

Read the report from SNS here (in Swedish)

Read the debate piece in Dagens Nyheter (in Swedish)

David Seim is a professor of economics at Stockholm University:

More about him here

Peter Fredriksson is a professor at Uppsala University.