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Generating Skilled Self-Employment in Developing Countries: Experimental Evidence from Uganda

88 Pages Posted: 23 May 2013 Last revised: 30 Apr 2014

Christopher Blattman

University of Chicago, Harris School of Public Policy; National Bureau of Economic Research (NBER)

Nathan Fiala

University of Connecticut - Department of Agricultural and Resource Economics

Sebastian Martinez

Inter-American Development Bank (IDB)

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Date Written: November 14, 2013

Abstract

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, C93

Suggested Citation

Blattman, Christopher and Fiala, Nathan and Martinez, Sebastian, Generating Skilled Self-Employment in Developing Countries: Experimental Evidence from Uganda (November 14, 2013). Quarterly Journal of Economics, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2268552 or http://dx.doi.org/10.2139/ssrn.2268552

Christopher Blattman (Contact Author)

University of Chicago, Harris School of Public Policy ( email )

1101 East 58th Street
Chicago, IL 60637
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Nathan Fiala

University of Connecticut - Department of Agricultural and Resource Economics ( email )

Sebastian Martinez

Inter-American Development Bank (IDB) ( email )

1300 New York Ave
Washington, DC 20011
United States

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