In economies characterized by low labor demand and high rates of youth unemployment, entrepreneurship training has the potential to enable youth to gain skills and create their own jobs. This paper presents experimental evidence on a new entrepreneurship track that provides business training and personalized coaching to university students in Tunisia. Undergraduates in the final year of licence appliquée were given the opportunity to graduate with a business plan instead of following the standard curriculum. This paper relies on randomized assignment of the entrepreneurship track to identify impacts on labor market outcomes one year after graduation. The analysis finds that the entrepreneurship track was effective in increasing self-employment among applicants, but that the effects are small in absolute terms. In addition, the employment rate among participants remains unchanged, pointing to a partial substitution from wage employment to self-employment. The evidence shows that the program fostered business skills, expanded networks, and affected a range of behavioral skills. Participation in the entrepreneurship track also heightened graduates’ optimism toward the future shortly after the Tunisian revolution.
Impact on self-employment: Individual reporting having been self-employed over the last year/week. Impact on employment status: Likelihood of being employed in the last 7 days. Impact on employment characteristics: Hours worked, earnings, having a contract, being covered by social security, working in a large firm, reservation wages. Business skills: Self-reported business skills. Networks: Whether the beneficiaries registered at employment offices, whether they knew an entrepreneur/employment officer/banker, how often they interacted with him/her. Preference and behavioural skills: Willingness to take risk, patience, soft skills (extraversion, agreeableness, conscientiousness, emotional stability, openness to experience, impulsiveness, passion for work, tenacity, etc.). Attitude towards the future. Access to credit: knows how to apply for credit, expect to be able to obtain credit, has applied for credit.
Impact on self-employment: The intervention increased self-employment among programme participants approximately one year after graduation. Impact on employment status: No evidence that the programme significantly affected overall employment. Impact on employment characteristics: The entrepreneurship track did not promote higher quality jobs among participants. There was no significant impact on employment in the formal sector, firm size, hours of work, or earnings. Business skills: Beneficiaries report having more practical experience in realising projects. They also report to have better knowledge about topics taught in the programme. Networks: The programme was effective in increasing the business and employment networks of participants. Preference and behavioural skills: No evidence that the program had an impact on self-reported risk and time preference parameters. Significant decrease in agreeableness, significant increase in extraversion, decrease in conscientiousness and emotional stability, decrease in impulsiveness. Attitude towards the future: Beneficiaries reported being much more optimistic about the future Access to credit: Treatment group was more likely to be confident to be able to obtain credit and to have actually applied for credit. However they were not more likely to know how to apply for credit and were also no more likely to have obtained credit.