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A Firm of One’s Own: Experimental Evidence on Credit Constraints and Occupational Choice

Author

Listed:
  • Andrew Brudevold-Newman

    (World Bank)

  • Maddalena Honorati

    (World Bank)

  • Gerald Ipapa

    (University of Delaware)

  • Pamela Jakiela

    (Williams College
    BREAD
    Center for Global Development
    IZA)

  • Owen Ozier

    (Williams College
    BREAD
    IZA
    J-PAL)

Abstract

We evaluate two labor market interventions targeting young women in Nairobi, Kenya. The first was a multifaceted program involving vocational training, in-kind transfers of physical capital, and ongoing mentoring. The second was an unrestricted cash grant. Both interventions shift women into self-employment, impacts which persist after six years. Both programs also increase income in the short-term, but those effects disappear over time. Though the two treatments have similar impacts on labor market outcomes, women in the multifaceted program report significantly higher wellbeing six years after treatment relative to both women in the control group and those who received the grants.

Suggested Citation

  • Andrew Brudevold-Newman & Maddalena Honorati & Gerald Ipapa & Pamela Jakiela & Owen Ozier, 2023. "A Firm of One’s Own: Experimental Evidence on Credit Constraints and Occupational Choice," Working Papers 646, Center for Global Development.
    • Handle: RePEc:cgd:wpaper:646
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    Citations

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    Cited by:

    1. Blattman, Christopher & Dercon, Stefan & Franklin, Simon, 2022. "Impacts of industrial and entrepreneurial jobs on youth: 5-year experimental evidence on factory job offers and cash grants in Ethiopia," Journal of Development Economics, Elsevier, vol. 156(C).
    2. McIntosh, Craig & Zeitlin, Andrew, 2022. "Using household grants to benchmark the cost effectiveness of a USAID workforce readiness program," Journal of Development Economics, Elsevier, vol. 157(C).
    3. Sinem Kilic Celik & M. Ayhan Kose & Franziska Ohnsorge, 2020. "Subdued Potential Growth: Sources and Remedies," Koç University-TUSIAD Economic Research Forum Working Papers 2009, Koc University-TUSIAD Economic Research Forum.
    4. Baird, Sarah & McIntosh, Craig & Özler, Berk, 2019. "When the money runs out: Do cash transfers have sustained effects on human capital accumulation?," Journal of Development Economics, Elsevier, vol. 140(C), pages 169-185.
    5. Omika Bhalla Saluja & Priyanka Singh & Harit Kumar, 2023. "Barriers and interventions on the way to empower women through financial inclusion: a 2 decades systematic review (2000–2020)," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-14, December.
    6. Abhijit Banerjee & Paul Niehaus & Tavneet Suri, 2019. "Universal Basic Income in the Developing World," Annual Review of Economics, Annual Reviews, vol. 11(1), pages 959-983, August.
    7. Craig McIntosh & Andrew Zeitlin, 2021. "Cash versus Kind: Benchmarking a Child Nutrition Program against Unconditional Cash Transfers in Rwanda," Papers 2106.00213, arXiv.org.
    8. Stöterau, Jonathan, 2019. "Job training programs for youth in low-income countries," PEGNet Policy Briefs 15/2019, PEGNet - Poverty Reduction, Equity and Growth Network, Kiel Institute for the World Economy (IfW Kiel).
    9. Edmonds, Eric & Theoharides, Caroline, 2020. "The short term impact of a productive asset transfer in families with child labor: Experimental evidence from the Philippines," Journal of Development Economics, Elsevier, vol. 146(C).

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    More about this item

    Keywords

    youth unemployment; vocational training; cash grants; microenterprises; entrepreneurship; occupational choice; credit constraints; Africa; gende;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • M53 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Training
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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