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

Author

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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.

Suggested Citation

  • Claudia Martínez A. & Esteban Puentes & Jaime Ruiz-Tagle, 2013. "Micro-Entrepreneurship Training and Asset Transfers: Short Term Impacts on the Poor," Working Papers wp380, University of Chile, Department of Economics.
    • Handle: RePEc:udc:wpaper:wp380
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    Cited by:

    1. Margaret Miller & Julia Reichelstein & Christian Salas & Bilal Zia, 2015. "Can You Help Someone Become Financially Capable? A Meta-Analysis of the Literature," The World Bank Research Observer, World Bank, vol. 30(2), pages 220-246.
    2. David McKenzie & Christopher Woodruff, 2017. "Business Practices in Small Firms in Developing Countries," Management Science, INFORMS, vol. 63(9), pages 2967-2981, September.
    3. de Mel, Suresh & McKenzie, David & Woodruff, Christopher, 2014. "Business training and female enterprise start-up, growth, and dynamics: Experimental evidence from Sri Lanka," Journal of Development Economics, Elsevier, vol. 106(C), pages 199-210.
    4. Claudia Martinez A. & Esteban Puentes & Jaime Ruiz-Tagle, 2015. "Do Micro-Entrepreneurship Programs Increase Wage-Work? Evidence from Chile," Working Papers wp407, University of Chile, Department of Economics.
    5. Laurin Janes, 2013. "Can capital grants help microenterprises reach the productivity level of SMEs? Evidence from an experiment in Sri Lanka," Economics Series Working Papers WPS/2013-18, University of Oxford, Department of Economics.
    6. Verónica Alaimo & Mariano Bosch & David S. Kaplan & Carmen Pagés & Laura Ripani, 2015. "Jobs for Growth," IDB Publications (Books), Inter-American Development Bank, number 90977, February.
    7. 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.
    8. Burchi, Francesco & Strupat, Christoph, 2018. "Unbundling the impacts of economic empowerment programmes: evidence from Malawi," IDOS Discussion Papers 32/2018, German Institute of Development and Sustainability (IDOS).
    9. Peter J. Glick & Crystal Huang & Nelly Mejia, 2015. "The Private Sector and Youth Skills and Employment Programs in Low and Middle-Income Countries," World Bank Publications - Reports 23260, The World Bank Group.

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