The Impacts of Industrial and Entrepreneurial Work on Income and Health: Experimental Evidence from Ethiopia
84 Pages Posted: 27 Sep 2016 Last revised: 10 Oct 2017
Date Written: June 22, 2017
Working with five Ethiopian firms, we randomized applicants to an industrial job offer, an “entrepreneurship” program of $300 plus business training, or control status. Industrial jobs offered more and steadier hours but low wages and risky conditions. The job offer doubled exposure to industrial work but, since most quit within months, had no impact on employment or income after a year. Applicants largely took industrial work to cope with adverse shocks. This exposure, meanwhile, significantly increased health problems. The entrepreneurship program raised earnings 33 percent and provided steadier hours. When barriers to self-employment were relieved, applicants preferred entrepreneurial to industrial labor.
Keywords: wage labor, factories, employment, entrepreneurship, cash transfers, field experiment
JEL Classification: J24, O14, F16, J81, O17
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