Using a randomized experiment in Chile we study the impact role models have in the context of a training program for micro-entrepreneurs. We show that being in a group randomly chosen to be visited by a successful alumnus of the program increases household income one year after, mostly due to increased business participation and business income. We also randomized the provision of personalized “consulting sessions” vis-a-vis group sessions, and observe similar effects on income, with the role model intervention being significantly more cost effective and better suited for less experienced businesses.
Socioeconomic condition of participants' households, business situation, access to credit and banking, adoption of financial and management techniques
Access to the one-on-one consulting session led to improvements in some business practices and business knowledge, whereas exposure to the role model left those unaffected.
Having access to the role model session or the one-on-one consulting led to higher business survival rates and, consequently, to higher business ownership rates one year after the programme (3 to 5 percentage points increase).
Sales and profits also increased, especially for the group exposed to the role model.
Receiving a one-on-one consulting session instead of the group consulting session didn’t lead to increases in employment, hours worked or access to credit or banking.
One year after the programme, access to the role model session or the one-on-one consulting session had increased monthly household income by a similar amount, of around 15 per cent. This increase was concentrated among those who already had a business at the start of the programme.
Exposure to the role model was relatively more effective for newer businesses, while access to one-on-one consulting was especially valuable for older businesses and more educated individuals.
The results of the one-on-one consulting didn’t depend on whether the session took place in the classroom or at the business.