1. Informality and Self-employment

2. Previous work...
Informality in China and
Western Balkans
Unlocking potential in West
Africa, Vietnam and Peru
Identifying small business with
growth potential in Ghana
High informality (> 60% don't have social insurance)
More stringent labor regulations did not change things
Need to reduce SS contributions for low-skilled
There are small gazelles that operate with little capital
Need to identify them and provide financing
Other constraints are corruption, infrastructure, skills &
lack of voice
Are there tools that can be used to identify gazelles?
Usually, this is done through groups of experts
But a survey was able to also identify the best...
... and predict growth potential
Pilots in Ghana, Nigeria,
Rwanda, and Uganda

3. Self-employment and
entrepreneurship

4. Objectives
Profiling of the self-employed &
constraints assessment tool
Inventory of programs
Review of impact evaluations
Blue prints to guide the design of
pilots and evaluations
Completed
Draft tool under
preparation
Report under
preparation
In progress

5. Profiling

7. UNSUCCESSFUL ENTREPRENEURS
All
East Asia
Eastern Europe
Latin America
Middle East and North Africa
South Asia
SS Africa
0 22.5 45 67.5
Non-Agr Agriculture

8. CONSTRAINTS
SKILLS (T, C, NC)
INFORMATION
BARRIERSTO ENTRY
FINANCING
BUSINESS ENV.

9. CONSTRAINTS AND
PROGRAMS
SKILLS (T, C, NC)
INFORMATION
BARRIERSTO ENTRY
FINANCING
BUSINESS ENV.
Training (technical, business K, life skills)
Advisory services / networking
Credit, grants, insurance
Integration into value chains
Changes in regulations / infrastructure

10. ROLE OFTHE PROGRAMS
• Facilitate "entrance"
• Increase the productivity of
current, economically viable,
activities
• Facilitate transitions from
low to high productivity
activities

11. Inventory

12. Two Modules
Inventory of Global
Programs
Inventory of Programs with
Impact Evaluations
NGOs
International organizations

13. Types of programs
Training
Mentoring
Networking
Finance
Value chains
0 20 40 60 80

14. Training
Finance
Business knowledge
Life skills
Management
ICT
0 17.5 35 52.5 70

15. Target group
Current entrepreneur
Potential
Low-end entrepreneur
High impact entrepreneur
0 17.5 35 52.5 70

16. ILO Improve Your Business (SIYB)

17. Junior Achievement

18. Techno Serve (value chains)

19. IDA - IBRD projects

20. Value chains

22. Very large variation in terms
of design...
Selection of beneficiaries
Region
Types of interventions
Content of training
Delivery
Duration
Costs
... and we do not know what works

23. Impact Evaluations

24. 38 STUDIES
• Focus on current or potential "entrepreneurs"
• Rigorous experimental or quazi experimental evaluations
(control vs. treatment groups)
• Evaluations conducted over the last10 years in developing
countries
• Results in public domain (published by March 2012)

25. PROGRAMS
• TRAINING: technical, life skills, business & financial
management
• FINANCE: credit, grants, savings, insurance
• TRAINING + FINANCE

26. DISTRIBUTION OF PROGRAMS
SAR
27%
LAC
27%
ECA
6%
MENA
5%
SSA
24%
EAP
11%

27. OUTCOMES
EMPLOYMENT
EARNINGS
BUSINESS PRACTICE
BUSINESS PERFORMANCE
FINANCIAL KNOWLEDGE
ATTITUDES
Positive
Impact
Size
effect

28. CONTROLS
POPULATION
GROUPS
SERVICE
DELIVERY
CONTEXT
Government, NGO, University, MFI
Female, youth, safety nets beneficiary,
MFI client, business owner
Region, income, labor market conditions,
business environment

29. AVERAGE SIZE EFFECTS
Employment
Earnings
Business K
Business practice
Financial K
Attitudes
0 0.075 0.15 0.225 0.3
Training Finance Both

30. T-statistic
-6.00
-1.50
3.00
7.50
12.00
Diferencia entre grupo de tratamiento y control (puntos porcentuales)
-0.450 -0.225 0.000 0.225 0.450 0.675 0.900
Positive and Statistically Significative

31. DETERMINANTS OF
CHANGES IN EMPLOYMENT
Training only
Finance only
Youth
Business owner
Urban
# Months
Experimental
-0.3 -0.225 -0.15 -0.075 0 0.075 0.15

32. TAKE AWAYS
• Programs are important
• Results have been mixed
• Need to better understand
the constraints ("gazelles" vs
subsistence entrepreneurs)
• Target integrated services
• Pilot and evaluate