EMA payments 'are cost-effective'

December 15 2010

The government's decision to scrap Educational Maintenance Allowance (EMA) payments does not make economic sense, it has been suggested.

Research carried out by the Institute for Fiscal Studies (FIS) found that the introduction of the scheme led to a four per cent rise in the number of eligible 16-year-olds staying in education.


"Based on these impacts, and on estimates of the financial benefits of additional education taken from elsewhere in the economics literature, the study concluded that the costs of providing EMA were likely to be exceeded in the long run by the higher wages that its recipients would go on to enjoy in future," the FIS noted.


The payments of £30 per student per week cost the government around £560 million a year.

EMA will now close to new applicants from January 2011. Those who currently receive will find their payments stopped at the end of the current academic year.

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