We investigate the impact of a program providing asset transfers and business training to low income individuals in Chile, and asked whether a larger asset transfer would magnify the program's impact. We randomly assigned participation in a large scale, publicly run micro-entrepreneurship program and evaluated its effects over 45 months. The program improved business practices, employment, and labor income. In the short run, self-employment increased by 14.8/25.2 percentage points for a small/large asset transfer. In the long run, individuals assigned to a smaller transfer were 9 percentage points more likely to become wage workers, whereas those assigned to larger transfers tended to remain self-employed.
Policy implications
Access to training and assets improves business outcomes, and the level of transfer matters. Wage-work is a significant opportunity cost in a middle income country such as Chile.
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Additional information
Reference
Martínez A., C., Puentes, E., Ruiz-Tagle, J. (2018). 'The Effects of Micro-entrepreneurship Programs on Labor Market Performance: Experimental Evidence from Chile'. American Economic Journal: Applied Economics.