Behind the GATE Experiment: Evidence on Effects of and Rationales for Subsidized Enterpreneurship Training

Theories of market failures and targeting motivate the promotion of entrepreneurship training programs and generate testable predictions regarding heterogeneous treatment effects from such programs. Using a large randomized evaluation in the United States, we find no strong or lasting effects on those most likely to face credit or human capital constraints, or labor market discrimination. We do find a short-run effect on business ownership for those unemployed at baseline, but this dissipates at longer horizons. Treatment effects on the full sample are also short-term and limited in scope: we do not find effects on business sales, earnings, or employees.

Hypotheses/research question 
Is the GATE Programme/Entrepreneurship training a valid response to various forms of market failure (allocative inefficiency in credit, labour, insurance and human capital markets)? Can such a program have an effect on business sales, earnings or employees?
Study design 
Parallel-group
Reference 
Fairlie, R.W., Karlan, D., & Zinman, J., 2015. 'Behind the GATE Experiment: Evidence on Effects of and Rationales for Subsidized Entrepreneurship Training'. American Economic Journal: Economic Policy, vol. 7(2), pages 125-61.