Do Interventions Targeted at Micro-Entrepreneurs and Small and Medium-Sized Firms Create Jobs? A Systematic Review of the Evidence for Low and Middle Income Countries

37 Pages Posted: 24 May 2014

See all articles by Michael Grimm

Michael Grimm

Erasmus University Rotterdam; University of Passau; IZA; DIW Berlin

Anna Luisa Paffhausen

University of Passau

Abstract

Worldwide 600 million jobs are needed over the next 15 years to keep employment rates at their current level. Governments, non-governmental organizations and donors spend on targeted programs and broader policies to enhance employment creation and the creation of new firms. Because most employment in low and middle income countries is in micro, small and medium-sized enterprises, these firms are especially targeted by such interventions. Despite these efforts, not much is known about which of these interventions are really effective and under which conditions particular interventions work.This systematic review synthesizes the existing evidence on the impact of these programs. Overall the review shows that creating employment is a very complex challenge. Many conditions have to be met before interventions in favor of individual enterprises do not only improve business practices and performance but also lead to additional jobs. A striking finding is that the study design matters for the impacts found; randomized controlled trials find systematically smaller effects than quasi-experimental studies. A significant shortcoming of the literature is that almost nothing is known about long term effects and cost effectiveness.

Keywords: employment, active labor market policy, firm creation, micro, small and medium sized firms, impact evaluations, systematic review

JEL Classification: D22, G21, J21, O10

Suggested Citation

Grimm, Michael and Paffhausen, Anna Luisa, Do Interventions Targeted at Micro-Entrepreneurs and Small and Medium-Sized Firms Create Jobs? A Systematic Review of the Evidence for Low and Middle Income Countries. IZA Discussion Paper No. 8193. Available at SSRN: https://ssrn.com/abstract=2441489

Michael Grimm (Contact Author)

Erasmus University Rotterdam ( email )

Kortenaerkade 12
P.O. Box 29776
The Hague, 2502LT
Netherlands

HOME PAGE: http://www.iss.nl

University of Passau ( email )

Innstrasse 29
Passau, 94032
Germany

HOME PAGE: http://www.wiwi.uni-passau.de/grimm.html

IZA ( email )

P.O. Box 7240
Bonn, D-53072
Germany

DIW Berlin ( email )

Mohrenstra├če 58
Berlin, 10117
Germany

Anna Luisa Paffhausen

University of Passau ( email )

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
64
Abstract Views
536
rank
358,459
PlumX Metrics