Paying youngsters aged 16-19 to stay on at school or college has achieved its aim of increasing participation significantly, particularly among low-income families.
A study of the introduction of education maintenance allowances (EMAs) in four pilot areas in Scotland found participation was up by 7 per cent overall and by 9 per cent among young people from low-income families.
Linda Croxford and Jenny Ozga, from the Centre for Educational Sociology at Edinburgh University, reported that young people receiving an allowance saw it as a "bonus" which helped them stay on at school if their friends left, that it motivated them to study harder and that it gave then a "better outlook" on school.
Most, however, would have stayed on anyway, while some indicated that there were no real alternatives and that they preferred to stay in school rather than go to college, which was unfamiliar to them.
One student told the researchers: "If your friends are leaving, it makes it easier to stay on. I wanted to stay anyway, and my grades were OK, so I could. Some people don't stay on because their friends leave, but the money means there's now a larger group staying on together."
However, the research team found that more attention needed to be given to finding ways of using the "learning agreement" as a means of raising expectations and achievement. The agreement sets out attainment, behaviour and attendance targets which must be reached before the allowance and bonuses can be paid - but, according to the study, pupils and staff tended to view it as little more than an administrative requirement.
Further education staff had mixed views about the effectiveness of allowances. Some felt the link to attendance might help potentially problematic students settle down to work, but others felt it was simply not a motivator in FE.
In schools, however, the number of winter leavers was reduced and S5 completions rose. The researchers state: "The survey data and the interviews enable us to build up a picture of EMA recipients as young people with positive attitudes to school and to gaining qualifications, who wanted to stay on but would probably have been prevented from so doing because of financial circumstances.
The report adds: "The EMA has made a material difference to these young people, and may well have further beneficial effects within the family and for the young person's confidence and sense of self-worth. It is clearly much-needed."
The profile of pupils benefiting from the allowance suggests they are not persistent truants or troublemakers. "Their motivation is already quite high, they often have specific career intentions, and the EMA works to reinforce these," the researchers state.
The scheme has benefited 7,500 young people since the pilot programme was launched in 1999, and a further 40,000 will be eligible by the time it is fully implemented in 2008.