Is a combination of language and vocational training an effective labour market policy for immigrants? - a quantitative study of Swedish municipalities

Abstract: In recent years, Swedish municipalities have introduced programs that combine Swedish language education with vocational training. However, due to the novelty and lack of an established framework, data and research on their effectiveness in improving immigrant labour market performance is limited. This essay addresses this gap by estimating the causal effect of vocational training combined with Swedish for immigrants (SFI) on employment among newly arrived immigrants. We employ a staggered Difference-in-Difference method using a self-collected and unique dataset covering 174 out of 290 municipalities, identifying which municipalities offer vocational SFI and when these programs were implemented. Additionally, we utilise municipality-level employment data for foreign-born individuals from Statistics Sweden (SCB). The results show a positive treatment effect of vocational SFI on employment rates. Among foreign-born individuals residing for 2-3 years, a positive effect is observed at the 10% significance level, while residents of 4-9 years experience a slightly higher treatment effect, significant at the 1% level.