Generating Skilled Self-Employment in Developing Countries: Experimental Evidence from Uganda
Columbia University - Department of Political Science; Columbia University - School of International & Public Affairs (SIPA); Center for Global Development; Innovations for Poverty Action
German Institute for Economic Research (DIW Berlin)
Inter-American Development Bank (IDB)
November 14, 2013
Quarterly Journal of Economics, Forthcoming
We study a government program in Uganda designed to help the poor and unemployed become self-employed artisans, increase incomes, and thus promote social stability. Young adults in Uganda’s conflict-affected north were invited to form groups and submit grant proposals for vocational training and business start-up. Funding was randomly assigned among screened and eligible groups. Treatment groups received unsupervised grants of $382 per member. Grant recipients invest some in skills training but most in tools and materials. After four years half practice a skilled trade. Relative to the control group, the program increases business assets by 57%, work hours by 17%, and earnings by 38%. Many also formalize their enterprises and hire labor. We see no impact, however, on social cohesion, anti-social behavior, or protest. Impacts are similar by gender, but are qualitatively different for women because they begin poorer (meaning the impact is larger relative to their starting point) and because women’s work and earnings stagnate without the program but take off with it. The patterns we observe are consistent with credit-constraints.
Keywords: Employment, poverty, entrepreneurship, cash transfers, occupational choice, Uganda, field experiment
JEL Classification: J24, O12, D13, C93working papers series
Date posted: May 23, 2013 ; Last revised: November 15, 2013
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