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Microenterprise As An Exit Route From Poverty:* Recommendations For Programs And Policy Makers


  • Timothy Bates
  • Lisa Servon


The objective of this study is to shed light on whether and how microenterprise programs can be used as an economic development strategy to enable low-income people to achieve self-sufficiency through self-employment. Our findings provide little support for the notion that hard work and a small loan are sufficient ingredients for business success. Viable small firms are usually headed by well-educated owners and/or those possessing specific skills that serve as a basis for successful business creation and operation. Potential entrepreneurs lacking assets, skills, and support networks are unlikely to support themselves through self-employment earnings alone. As a poverty alleviation strategy, microenterprise is not a panacea. Nevertheless, programs targeting the poor who do have skills, resources, and support networks can be useful vehicles for helping some to escape poverty.

Suggested Citation

  • Timothy Bates & Lisa Servon, 1998. "Microenterprise As An Exit Route From Poverty:* Recommendations For Programs And Policy Makers," Working Papers 98-17, Center for Economic Studies, U.S. Census Bureau.
  • Handle: RePEc:cen:wpaper:98-17

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    References listed on IDEAS

    1. Lisa J. Servon, 1997. "Microenterprise Programs in U.S. Inner Cities: Economic Development or Social Welfare?," Economic Development Quarterly, , vol. 11(2), pages 166-180, May.
    2. Timothy Bates & David Howell, 1998. "The Declining Status of Minorities in the New York City Construction Industry," Economic Development Quarterly, , vol. 12(1), pages 88-100, February.
    3. Reynolds, Paul & Miller, Brenda, 1992. "New firm gestation: Conception, birth, and implications for research," Journal of Business Venturing, Elsevier, vol. 7(5), pages 405-417, September.
    4. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-670, May.
    5. Alfred R Nucci, 1992. "The Characteristics of Business Owners Database," Working Papers 92-7, Center for Economic Studies, U.S. Census Bureau.
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    Cited by:

    1. J. G. Sri Ranjith, 2015. "The Effect of Microenterprises on Poverty: A Cross-county Analysis on US Urban Poverty," International Journal of Economics and Empirical Research (IJEER), The Economics and Social Development Organization (TESDO), vol. 3(3), pages 128-150, March.
    2. Magnus Lofstrom, 2011. "Low-skilled immigrant entrepreneurship," Review of Economics of the Household, Springer, vol. 9(1), pages 25-44, March.
    3. Dr. J. G. Sri Ranjith & Dr. O. G Dayaratna Banda, 2014. "Determinants of Success of Small Business: A Survey-Based Study in Kuliyapitiya Divisional Secretariat of Sri Lanka," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 4(6), pages 38-50, June.
    4. Schreiner, Mark & Woller, Gary, 2003. "Microenterprise Development Programs in the United States and in the Developing World," World Development, Elsevier, vol. 31(9), pages 1567-1580, September.
    5. Jeanne Bellotti & Sheena McConnell & Jacob Benus, "undated". "Growing America Through Entrepreneurship," Mathematica Policy Research Reports d3bbbcef77fe49cb988c23d84, Mathematica Policy Research.
    6. Christy, Ralph D. & Wenner, Mark D. & Dassie, Wylin, 2000. "A Microenterprise-Centered Economic Development Strategy For The Rural South: Sustaining Growth With Economic Opportunity," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 32(02), August.
    7. repec:mpr:mprres:6190 is not listed on IDEAS
    8. repec:mpr:mprres:5464 is not listed on IDEAS
    9. Mark Schreiner, 2001. "Evaluation and Microenterprise Programs," Development and Comp Systems 0108002, EconWPA, revised 27 Dec 2001.
    10. Jacob Benus & Sheena McConnell & Jeanne Bellotti & Theodore Shen & Kenneth Fortson & Daver Kahvecioglu, "undated". "Growing America Through Entrepreneurship: Findings from the Evaluation of Project GATE," Mathematica Policy Research Reports afeceaeccbf54835ae4f79e73, Mathematica Policy Research.
    11. Sultan, Yousuf & Masih, Mansur, 2016. "Does microfinance affect economic growth? Evidence from Bangladesh based on ARDL approach," MPRA Paper 72123, University Library of Munich, Germany.

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    CES; economic; research; micro; data; microdata; chief; economist;


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