Unpacking the determinants of entrepreneurship development and economic empowerment for women

The training provided is the ILO’s Gender and Entrepreneurship Together – GET Ahead for Women in Enterprise program. This program “differs from conventional business training materials by highlighting essential entrepreneurial skills from a gender perspective, whether applied to starting or improving an individual, family or group business. It addresses the practical and strategic needs of low-income women in enterprise by strengthening their basic business and people management skills. It shows women how to develop their personal entrepreneurial traits and obtain support through groups, networks and institutions dealing with enterprise development” (Bauer et al, 2004). The program began in Thailand in 2001, and over the next decade was used in 18 countries around the developing world.
An objective of the program is to create a “business mind” among low-income women engaged in small-scale businesses. The training methodology is participatory, with practical exercises to teach concepts. For example, women learn about the different types of costs involved in production, and how to account for their own costs through making lemonade; have role play exercises to practice different sales strategies for customers; and make necklaces to discuss a production process and the importance of different factors in product design.
Topics covered included several gender concepts that tend not be emphasized in general business training programs such as: the difference between sex and gender, and the role of cultural constraints in shaping women in business; dividing household and business tasks; and how to network with other women and the role of women’s associations. In addition, it covers a number of topics more typical of standard programs such as recordkeeping and bookkeeping; separating business and household finances; marketing; financial concepts; costing and pricing; generating and fine-tuning new business ideas; setting smart objectives; and traits needed for business success.
The workshop lasts 5 days, and is taught to a group of 20-30 women at a time.

2013-06-25

2013-11-29

profitability, sales, and business survivorship

Business is still operating at the time of the survey. This will be measured directly for those answering the follow-up survey, and assessed via interviewer observation and third-party reporting for those unable to be re-interviewed.

Profits and Sales will be measured as the following set of outcomes:
1. Total sales in the last day, truncated at the 99th percentile. (Baseline Q5.6a).
2. Total sales in the last week, truncated at the 99th percentile. (Baseline Q5.6b)
3. Total sales in the last week of product accounting for largest share of profits, truncated at the 99th percentile. (Baseline Q5.8d (price per unit)*Baseline Q5.8e (number of units sold)).
4. Average weekly profits over the last 2 weeks, truncated at the 99th percentile (Measured at market census). If they only report profits for one of the last two weeks and the other is missing, the week for which data is recorded will be used.
5. Mark-up profits in the last week of product accounting for largest share of profits, truncated at the 99th percentile. (Baseline Q5.8d (price per unit) – 5.8c (cost per unit))*(Baseline Q5.8e (number of units sold)).
6. Third-party valuation of business inventories for sale, truncated at the 99th percentile (baseline administrative data from photos)
7. A standardized profits and sales impact will be obtained by aggregating these different effects as described below in our methods section as a standardized z-score.

Individuals were assigned to treatment and control in a two-stage process: first at the market level, and then at the individual level within market. Then treated individuals were further assigned to one of three treatment invitation types

First, Markets were assigned to treatment (have some individuals in them invited to training) or control (no one in the market would be invited to training) status. Randomization was done within 35 strata defined by geographical region (within county) and the number of women surveyed in the market. In Kakamega and Kisii the size strata were 26 or under, 27 to 30, 31+; in Embu the size strata were <20 or 20+, and in Kitui the size strata varied within smaller geographic clusters between the two cuts used elsewhere. The need to ensure sufficient numbers for training meant that more than half the markets were allocated to treatment, with 93 markets assigned to treatment and 64 to control.
Then within each market, Individuals were assigned to treatment (be invited to training) or control (not be invited to training) within treated markets by forming four strata, based on quartiles of weekly profits from the census (<=450, 451-800, 801-1500, 1501-4000), and then assigning half the individuals within each strata to training. When the number of individuals in the strata was odd, the odd unit was also randomly assigned to training. This resulted in 1173 of the 2161 individuals in treated markets being assigned to treatment, and 988 to control.
Treated Individuals were further randomly assigned to one of three treatment invitation types within market. Individuals received one of three types of invitations: opt-in, active choice, or enhanced active choice.

Randomization done in office by a computer

Random selection at the market level, and then individual level within markets

Yes

157 markets

3,538 individuals

Markets: 93 treated, 64 control
Individuals: 1173 treated, 988 controls in treated markets, 1377 controls in control markets
Choice treatments: 393 opt-in, 387 active choice, 393 enhanced active choice

See pre-analysis plan

A common concern with efforts to directly help some small businesses to grow is that their growth
comes at the expense of their unassisted competitors. We test this possibility using a two-stage
randomized experiment in Kenya which randomizes business training at the market level, and then
within markets to selected businesses. Three years after training, the treated businesses are selling
more, earn higher profits, and their owners have higher well-being. Point estimates of the
spillovers on the competing businesses are small and not statistically significant, and the markets
as a whole have grown in terms of sales volume.

McKenzie, David, and Susana Puerto. 2021. "Growing Markets through Business Training for Female Entrepreneurs: A Market-Level Randomized Experiment in Kenya." American Economic Journal: Applied Economics, 13 (2): 297-332.

https://www.aeaweb.org/articles?id=10.1257/app.20180340