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Micro-Entrepreneurship Training and Asset Transfers: Short Term Impacts on the Poor

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  • Claudia Martínez A.
  • Esteban Puentes
  • Jaime Ruiz-Tagle

Abstract

Using a randomized controlled trial of a large-scale publicly run micro-entrepreneurship program in Chile, we assess the effectiveness of business training and asset transfers on individuals’ employment and income. About half of the participants had not yet started their businesses at intervention, allowing us to study the program effects by baseline economic activity. To analyze the shape of the production function, two levels of asset transfers are allocated. We find that the program does significantly increase individuals’ employment and income by 18% and 32% respectively after one year and significantly improves the business practices of its beneficiaries. The program seems more effective for individuals who are unemployed at the beginning of the program, followed by the selfemployed at the baseline. The effect on wage earners is positive only for low-income individuals. This is consistent with the presence of fixed costs. The additional transfer of assets has a positive and significant effect on employment and self-employment. However, the additional transfer does not have a statistically significant effect on labor and household income, consistent with rapidly decreasing returns in the production function.

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Bibliographic Info

Paper provided by University of Chile, Department of Economics in its series Working Papers with number wp380.

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Length: 54 pages
Date of creation: Mar 2013
Date of revision:
Handle: RePEc:udc:wpaper:wp380

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Web page: http://www.econ.uchile.cl/
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Cited by:
  1. de Mel, Suresh & McKenzie, David & Woodruff, Christopher, 2012. "Business Training and Female Enterprise Start-up, Growth, and Dynamics: Experimental evidence from Sri Lanka," CAGE Online Working Paper Series 98, Competitive Advantage in the Global Economy (CAGE).
  2. Miller, Margaret & Reichelstein, Julia & Salas, Christian & Zia, Bilal, 2014. "Can you help someone become financially capable ? a meta-analysis of the literature," Policy Research Working Paper Series 6745, The World Bank.
  3. Laurin Janes, 2013. "Can capital grants help microenterprises reach the productivity level of SMEs? Evidence from an experiment in Sri Lanka," CSAE Working Paper Series 2013-18, Centre for the Study of African Economies, University of Oxford.

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