Time Off to Upgrade Skills: The Labour Market Effects of a Large-Scale Educational Leave Programme

This paper combines a counterfactual impact analysis using rich administrative data with a participant survey to assess the long-term labour market effects of Austria's large-scale educational leave programme. The scheme allows eligible employees to take full- or part-time leave for further education, supported by income-compensating benefits. We find that participation substantially increases monthly earnings but does not improve employment probability. Full-time leave reduces employment in the short term and modestly in the long term, offsetting wage gains and resulting in no increase in cumulative earnings. Part-time leave yields even larger monthly wage increases and clear cumulative earnings gains, with no significant employment effects.