Making Entrepreneurs: Returns to Training Youth in Hard Versus Soft Business Skills

We study the medium-term impacts of the Skills for Effective Entrepreneurship Development (SEED) program, an innovative in-residence 3-week mini-MBA program for high school students modeled after western business school curricula and adapted to the Ugandan context. The program featured two separate treatments: the hard-skills MBA features a mix of approximately 75% hard skills and 25% soft skills; the soft skills curriculum has the reverse mix. Using data on 4,400 youth from a nationally representative sample in a 3-arm field experiment in Uganda, the 3.5 year follow-up demonstrated that training was effective in improving both hard and soft skills, but only soft skills were directly linked to improvements in self-efficacy, persuasion, and negotiation. The skill upgrade was rewarded by substantially higher earnings; 38.7% and 21.2% increases in earnings for those who attended hard- and soft-training, respectively, largely generated through self-employment. Furthermore, youth in both groups were more likely to start enterprises and more successful in ensuring their businesses’ survival. The program led to significantly larger profits (27.8% and 34.8% for hard- and soft- treatment arms respectively) and larger business capital investments (72.5% and 58.8% for SEED hard and SEED soft, respectively). Both SEED curricula were very cost-effective; one (two) month’s worth of extra earnings as a direct consequence of having attended the SEED hard (soft) program would exceed its total cost. These benefits abstract from the job- and business-creation benefits of the program, which were substantial: relative to the control group, SEED entrepreneurs created 985 additional jobs and 550 new businesses.

Policy implications 
A short intensive and well-designed training for secondary school students can boost transformational soft and hard entrepreneurial skills and set participants on a higher earning trajectory and expanded income opportunities.Providing the right skills to young future entrepreneurs can lead them to create ventures that grow beyond subsistence businesses and generate jobs and economic opportunities for others.
Chioda, L., Contreras-Loya, D., Gertler, P. and Carney, D., 2021. Making Entrepreneurs: Returns to Training Youth in Hard Versus Soft Business Skills (No. w28845). National Bureau of Economic Research.