From unemployment to self-employment: the role of entrepreneurship training

This paper uses data from the Growing America Through Entrepreneurship (GATE) program to assess the effectiveness of providing self-employment training to unemployed workers during a period of moderate unemployment and during the Great Recession. Results show that self-employment training can significantly improve the short-term self-employment and overall employment rates of unemployed workers, with effects on self-employment persisting for long periods after program entry. Although it appears unlikely that self-employment training may improve self-employment earnings, there is evidence that some participants may achieve higher salary and total earnings when the labor market is relatively strong. Based on these findings, we conclude that self-employment training can potentially be an effective short-term reemployment strategy, regardless of the overall economic conditions, but it is unlikely to help unemployed workers improve their long-term employment and earnings outcomes.