Sweden has for years been struggling with high youth unemployment. The problem is also a hot topic of discussion among experts and politicians, often leading to different proposals to solve the problem. The government chose in 2006 to do something about youth unemployment by lowering payroll taxes for employees up to 25 years. But many experts and studies show that the effects failed to materialize. This study will try to find out if the government subsidies have given any effect on the youth unenployment either by new jobs created or by movement in the labor force. I will use a regression model with an dependent, "difference in difference" variable where the change in the number of employed young people are compared to the change in the number of employed in the subsequent age group. The results show that subsidies are not given any positive effect on the youth employment rate in relation to the subsequent age group.