30 August 2012

Do Urban Livelihoods Programmes Work?

Apparently not in Sri Lanka.
The authors conduct a randomized experiment among women in urban Sri Lanka to measure the impact of the most commonly used business training course in developing countries, the Start-and-Improve Your Business program. They work with two representative groups of women: a random sample of women operating subsistence enterprises and a random sample of women who are out of the labor force but interested in starting a business. They track the impacts of two treatments -- training only and training plus a cash grant -- over two years with four follow-up surveys and find that the short and medium-term impacts differ. For women already in business, training alone leads to some changes in business practices but has no impact on business profits, sales or capital stock. In contrast, the combination of training and a grant leads to large and significant improvements in business profitability in the first eight months, but this impact dissipates in the second year. For women interested in starting enterprises, business training speeds up entry but leads to no increase in net business ownership by the final survey round.
Suresh de Mel, David  McKenzie, and Christopher Woodruff , "Business training and female enterprise start-up, growth, and dynamics: experimental evidence from Sri Lanka" (HT: @timothyogden)


Cynan said...

"We began by offering the training to an initial group of 40 of the potential enterprises in two D.S. locations. This offer did not mention the cash grants... only seven out of the 40 women who were offered this training showed up on the first day... We therefore revised our offer to include a 400 Rs per day attendance payment... we also told the treated sample that half of those completing training would be randomly chosen for a 15,000 Rs grant." (p 10).

Show up for 7 days training... have a 50% chance of getting the equivalent of about 50 days earnings as a grant. Pretty good lottery odds, no? Are the interests of the participants and the people running the study really aligned?

Would also ask whether there was any investment in follow up coaching or mentoring following the training, peer coaching, group formation, anything like that - can't see anything like that referred to in the paper. Especially noting ILO guidance which says "Trainers must undergo a 5-day training of trainers workshop to be certified in the use of the materials and methods and to develop a strategy for coaching and follow-up work with entrepreneurs." ( http://www.preparing4work.org/content/start-and-improve-your-business-siyb-international-labour-organization-ilo )
p25 suggests not, as it says "One option is more intensive (and expensive) one-on-one personalized mentoring and consulting, which Valdivia (2011) finds to increase sales by 18 percent." implying it wasn't attempted in this case.

So it was just the same kind of fire-and-forget training that has high probability of dissipating effects on anything else, everywhere else in the world? (Ever been on an SPSS or Excel course and forgotten most of it a year later?) Perhaps the broader question here isn't "do urban livelihoods programmes work" but "do unsupported one-off training interventions work."

Also can't see anything on a skim of the paper which measures things outside the business - subsistence small business owners use of the grant to retire other debts, paying for weddings or funerals, improved consumption/nutrition status for their children... I'm not clear if they attempted to measure or control for other these resource constraints or shocks in the households of the grant recipients and non recipients.

rovingbandit said...

Smart comments, thanks

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