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Impacts of industrial and entrepreneurial jobs on youth: 5-year experimental evidence on factory job offers and cash grants in Ethiopia

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  • Blattman, Chris
  • Franklin, Simon
  • Dercon, Stefan

Abstract

We study two interventions for underemployed youth across five Ethiopian sites: a $300 grant to spur self-employment, and a job offer to an industrial firm. Despite significant impacts on occupational choice, income, and health in the first year, after five years we see nearly complete convergence across all groups and outcomes. Short run increases in productivity and earnings from the grant dissipate as recipients exit their micro-enterprises. Adverse effects of factory work on health found after one year also appear to be temporary. These results suggest that one-time and one-dimensional interventions may struggle to overcome barriers to wage- or self-employment.

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  • Blattman, Chris & Franklin, Simon & Dercon, Stefan, 2019. "Impacts of industrial and entrepreneurial jobs on youth: 5-year experimental evidence on factory job offers and cash grants in Ethiopia," SocArXiv zrqe4, Center for Open Science.
    • Handle: RePEc:osf:socarx:zrqe4
    DOI: 10.31219/osf.io/zrqe4
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    3. Matthew W. Ridley & Gautam Rao & Frank Schilbach & Vikram H. Patel, 2020. "Poverty, Depression, and Anxiety: Causal Evidence and Mechanisms," NBER Working Papers 27157, National Bureau of Economic Research, Inc.
    4. Lafortune, Jeanne & Pugatch, Todd & Tessada, José & Ubfal, Diego, 2022. "Can Interactive Online Training Make High School Students More Entrepreneurial? Experimental Evidence from Rwanda," IZA Discussion Papers 15064, Institute of Labor Economics (IZA).
    5. Avalos,Jorge Eduardo & Bossuroy,Thomas & Clay,Timothy Joseph Peter & Dutta,Puja Vasudeva, 2023. "Productive Inclusion Programs in Urban Africa," Social Protection Discussion Papers and Notes 183525, The World Bank.
    6. Annie Alcid & Erwin Bulte & Robert Lensink & Aussi Sayinzoga & Mark Treurniet, 2023. "Short- and Medium-term Impacts of Employability Training: Evidence from a Randomised Field Experiment in Rwanda," Journal of African Economies, Centre for the Study of African Economies, vol. 32(3), pages 296-328.
    7. Craig McIntosh & Andrew Zeitlin, 2022. "Skills and Liquidity Barriers to Youth Employment: Medium-term Evidence from a Cash Benchmarking Experiment in Rwanda," Papers 2209.08574, arXiv.org.
    8. Tefera,Girum Abebe & Buehren,Niklas & Goldstein,Markus P., 2020. "Short-Run Welfare Impacts of Factory Jobs : Experimental Evidence from Ethiopia," Policy Research Working Paper Series 9325, The World Bank.
    9. 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).
    10. Grover,Arti Goswami & Imbruno,Michele, 2020. "Using Experimental Evidence to Inform Firm Support Programs in Developing Countries," Policy Research Working Paper Series 9461, The World Bank.
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    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J81 - Labor and Demographic Economics - - Labor Standards - - - Working Conditions
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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