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Can Business Grants Mitigate a Crisis? Evidence from Youth Entrepreneurs in Kenya during COVID-19

Author

Listed:
  • Yanina Domenella

    (The World Bank)

  • Julian C. Jamison

    (Department of Economics, University of Exeter)

  • Abla Safir

    (The World Bank)

  • Bilal Zia

    (The World Bank)

Abstract

COVID-19 was a major shock to youth entrepreneurs and their businesses in Kenya. We study the causal impact of grants—worth two months of baseline business revenue—and business development services as potential mitigation measures. Using multiple rounds of phone surveys up to seven months from the start of the pandemic, the analysis finds that youth who are assigned business grants or a combination of grants and business development services are significantly more likely to maintain a business, earn more revenue and profits, retain employees, and report higher confidence and satisfaction with life. There are no corresponding effects of business development services alone, although the follow-up period is extremely short for training effects to materialize. These results suggest that cash infusion for young entrepreneurs in times of an aggregate shock can be instrumental in moderating its immediate harmful impacts.

Suggested Citation

  • Yanina Domenella & Julian C. Jamison & Abla Safir & Bilal Zia, 2021. "Can Business Grants Mitigate a Crisis? Evidence from Youth Entrepreneurs in Kenya during COVID-19," Discussion Papers 2110, University of Exeter, Department of Economics.
    • Handle: RePEc:exe:wpaper:2110
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    File URL: https://exetereconomics.github.io/RePEc/dpapers/DP2110.pdf
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    youth entrepreneurship; business grants; business development services; business training; COVID-19; pandemic relief;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M20 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - General
    • M53 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Training

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