The impact of psychology-focused and standard business training for women microentrepreneurs in Ethiopia

The impact evaluation will examine the effectiveness of a psychology-focused training as well as a more standard business training, to provide evidence on the impact of varied approaches to entrepreneurship training. We will compare an innovative action-based entrepreneurship skills training course, called “Personal Initiative (PI) Training” with a more traditional business training, called “Basic Business Skills and Entrepreneurship Development (BSED) Training”.

The PI training course focuses on helping entrepreneurs develop their personal initiative, on getting entrepreneurs to think about longer-term horizons, and on helping entrepreneurs to overcome barriers and deal with failure. Developed by Matthias Glaub and Michael Frese, the action-oriented approach to entrepreneurship training relies on heavily psychological approaches, and ultimately aims to encourage entrepreneurs to show proactive behavior. It starts with the development of an active mindset through action principles which is then refined and routinized with active practice during the training. The personal initiative training will focus, not purely on textbooks and classroom-based learning, but on developing entrepreneurial qualities and behaviors, as well as the ability to identify and exploit profitable business opportunities. The intervention was done through Technical and Vocational Education Training (TVET) colleges and will be compared to the standard vocational training offered by the WEDP program that focuses on teaching traditional managerial skills.

The BSED training focuses on business management skills but also teaches some psychological competencies. The content of the BSED training includes, competency, knowledge, skill and behavioral change that incorporate fourteen modules. For each training round, the trainers choose the most relevant modules based on the training needs of the training participants. Some of the key modules include: financial literacy, business and marketing, tax rules and regulation, enterprise management, book keeping, business plan, financial transaction, gender and gender related challenges.

2015-11-16

2016-04-30

Impacts on business performance, employment, individual well-being, household well-being, knowledge, empowerment and life satisfaction for the trainees will be measured.

For this training experiment, the impact evaluation team drew upon the Women Entrepreneurship Development Project (WEDP) registration database of clients in Addis Ababa, Ethiopia and randomly assigned 2000 women entrepreneurs to the different treatment arms. The research team randomly assigned WEDP clients into a treatment group who will be offered the PI training (750), a treatment group who will receive BSED training (750) and a control group (500) who will not be offered training for at least one year.

Randomization done in Stata on a computer

Firm level randomization

No

2,000 firms

2,000 firms

750 firms offered PI training; 750 firms offered BSED training and 500 firms in a control group who will not be offered training for at least one year.

The impact of psychology-focused and standard business training for women microentrepreneurs in Ethiopia