This study is the first to evaluate the setting up aid in the Rural Development Programme. For Sweden we investigate if the aid, firstly, speeds up the transition process to farm management and, secondly, affects income from farming and survival of the farm. The approach builds on a regression discontinuity design and explores an age 40-eligibility requirement in the setting up aid.

We find that the setting up aid has a impact on the transition to farm management, as well as it increases income from farming and farm survival. Consequently, the aid is likely to fulfil its aim of attracting young people into farming.