Generating Skilled Self-Employment in Developing Countries: Experimental Evidence from Uganda

To increase employment in northern Uganda, the government rolled out the Youth Opportunities Program (YOP) to help poor and unemployed adults become self-employed artisans. The government invited young adults to form groups and prepare proposals for how they would use a grant to train in and start independent trades. Funding was randomly assigned among 535 screened, eligible applicant groups consisting of both men and women. Successful proposals received one-time unsupervised grants worth $7,500 on average—about $382 per group member, roughly their average annual income. Treatment and control groups were surveyed at baseline and two and four years after the intervention.

2008-07-01

2008-09-30

(i) Income
(ii) Investment in training and asset
(iii) level of employment
(iv) occupational type
(v) hiring of labor
(vi) formalization of firms
(vii) increase in social cohesion

(I) Income, being a difficult variable to measure, is constructed from consumption data. Consumption is estimated using two indices. The first index is uses durable assets—a z score is constructed by taking the first principal component of 70 measures of land, housing quality, and household assets. The second index is for short-term nondurable consumption—a z-score constructed by taking the first principal component of 30 select food items consumed in the past three days and expenditures on 28 select nonfood items.
(II) Investment in training and asset: group reports to surveyor on self and members
(III) level of employment: self-reported
(IV) occupational type: self-reported
(V) hiring of labor: self-reported
(VI) formalization of firms: self-reported
(VII) increase in social cohesion: Self-reported data on 50 measures of sociopolitical attitudes and behavior such as (i) kin integration, capturing 4 measures of household relations; (ii) community participation, capturing 10 measures of associational life and collective action; (iii) community public good contributions, including 7 types of goods; (iv) antisocial behavior, based on 8 forms of aggressive behavior with neighbors, community leaders, and police, plus 18 additional measures; and (v) protest attitudes and participation, based on 7 measures of participation in and attitudes around violent antigovernment protests following the 2011elections.

To apply to the YOP program, young adults aged 16-35 had to form groups and write a proposal for how the group would train themselves in a skilled trade and use that trade to employ themselves. Group sizes ranged between 10-40 members. Selected applications were given a lump-sum transfer averaging $7,497 to a bank account with the understanding there would be little subsequent government oversight. When the trial began the government had a list of 535 groups that were eligible for the grant but not yet received them. From this pool, 265 groups were assigned treatment and 270 were assigned to the control group stratified by district.

Baseline surveys were conducted on both treatment and control groups by randomly selecting 5 members from each group to be tracked. After disbursement of the grant, two-year and four-year surveys were carried out with the same baseline respondents. In the case they had moved, not unusual for a youth demographic, attempts were made to find them in their new location. In cases where the respondent could not be traced at all, those that were found are weighted appropriately to make up for the missing observations.

Randomization done in office by a computer

Group eligible to receive grant, stratified by district.

Yes

535 eligible grant groups

2,667 (5 members per group except for one group that had 2 more)

265 treatment (received grant), 270 control