Assessing the impacts of entrepreneurship and vocational training in Nepal

Transcription

1 Assessing the impacts of entrepreneurship and vocational training in Nepal Shyamal Chowdhury, University of Sydney Uttam Sharma, Consultant, World Bank

2 Outline 1. Introduction 2. Program Description 3. Research questions 4. Study design 5. Data collection and descriptive statistics 6. Preliminary findings 7. Next steps and discussion

3 1. Introduction Govt. of Nepal and international donors have invested heavily in training: 55,000 trainees per year Aim is to stimulate entrepreneurship and employment opportunities We aim to evaluate two programs Micro Enterprise Development, and Skills Trainings and Employment Services (Path to Prosperity) Implemented by Employment Fund (EF), with financial support DFID (UK) and SADC (Switzerland). Trainings are provided free of charge. Program implemented in 30 of Nepal s 75 districts in 2014 by EF.

4 Incentives to training providers Vocational training: Training providers are paid more (60% of the total remuneration) if the trainees are found to be employed during the first 6 months after the training is completed Entrepreneurship training: First instalment: 40% of outcome price paid after completion of skill test Second instalment: 35% after registration of the enterprise and graduate become self employed Third instalment: 25% after creating new jobs (in addition to the trainee being self employed in that business)

5 2. Program descriptions Microenterprise Development Three months of training Occupations include furniture making, plumber, beautician and building electrician Trainees are not currently self employed but who want to start a new business Have taken vocational skills training in the past Vocational Training Three months of vocational training to the extreme poor. Training is provided for trades such as furniture making, handicraft, tailoring/garments, food and hospitality, and brick making. EF works through T & E providers, who normally select their trainees Based on the guidelines set by EF Both programs are restricted to both men and women aged who are currently not enrolled in formal education. Each trainee is trained for at least 390 hours (three months of intensive training) One third needs to be on the job training/apprenticeship based.

6 3. Research Questions Are these two vocational and entrepreneurship training programs effective in that their trainees find jobs and create new businesses? What kind of jobs do the trainees get, and what are the impacts on their incomes? Are the estimated impacts of the training interventions on the randomly selected program participants different from those on the trainees selected by the training providers?

7 4. Study design Randomized control trial 50 training events (with about 30 people in each event) across Nepal 34 events are allocated to the vocational training, 17 events were randomly assigned to a group where training participants are selected by the Training & Employment (T & E) providers In the rest 17 events, participants were randomly assigned into treatment and control groups 16 are allocated to the entrepreneurship training. all applicants were randomly assigned into treatment and control groups

8 Selection bias When the trainers select trainees, its choice may exhibit selection bias if certain groups of individuals are more likely to be included/excluded. In order to estimate any such biases, in one third of the randomly selected training events (17), the trainees were selected by T & E providers. By comparing the outcome and characteristics of those selected by the T & E providers with those randomly assigned to treatment groups, we will measure the extent of selection bias induced by the way program participants are selected by T & E providers.

9 5. Data collection The baseline survey was conducted in February to April 2014, before the program was implemented. The follow up data collection started in March end 2015, nine months after the training concluded. The earthquake impacted the field work Many in our sample were outside Nepal Phone interview conducted with some Information collected include household demography; education and health level; economic actives including wage income; agriculture and non agriculture enterprises; labor allocation; food and non food expenditures; and credit.

10 Descriptive Statistics Sample Original sample Assigned to treatment group Tracked during follow up treatment group tracked during follow up Vocational training (total) Vocational training (randomized training) Vocational training (nonrandomized training) Entrepreneurship training Total sample size (both types of training)

11 Balance during baseline: random assignment (voc training) Variable Mean Std. Dev. Mean Std. Dev. Statistical significance Control (139) Treatment (373) Person is gainfully employed (home cultivation is counted as employed) in Person is gainfully employed (home cultivation not counted as employed) in Whether the persons own the business in Monthly profit of those who own the business in Proportion of females Age in completed years Person's monthly income last month in Ever participated in a vocational or skill training course Amount received from remittance Non food expenditures including legal costs, tobacco and alcohol in Repair work/extension work expenses on home in Outstanding loans in Rs the person and spouse have in Outstanding business loans, including buying assets, in Rs the person and Amount lended to others by the person or spouse in Cash savings the person or spouse have in Total hours worked in a month Whether the family has migrants (excluding respondent) Whether they have formal business

12 Balance during baseline: training provider selection (voc training) Variable Mean Std. Dev. Mean Std. Dev. Statistical significance Control (151) Treatment (373) Person is gainfully employed (home cultivation is counted as employed) in Person is gainfully employed (home cultivation not counted as employed) in Whether the persons own the business in Monthly profit of those who own the business in Proportion of females *** Age in completed years Person's monthly income last month in Ever participated in a vocational or skill training course Amount received from remittance Non food expenditures including legal costs, tobacco and alcohol in Repair work/extension work expenses on home in Outstanding loans in Rs the person and spouse have in Outstanding business loans, including buying assets, in Rs the person and Amount lended to others by the person or spouse in Cash savings the person or spouse have in Total hours worked in a month Whether the family has migrants (excluding respondent) Whether they have formal business

13 Balance during baseline: random assignment (entrepreneurship training) Variable Mean Std. Dev. Mean Std. Dev. Statistical significance Control (150) Treatment (339) Person is gainfully employed (home cultivation is counted as employed) in Person is gainfully employed (home cultivation not counted as employed) in Whether the persons own the business in Monthly profit of those who own the business in Proportion of females Age in completed years Person's monthly income last month in Ever participated in a vocational or skill training course * Amount received from remittance * Non food expenditures including legal costs, tobacco and alcohol in Repair work/extension work expenses on home in * Outstanding loans in Rs the person and spouse have in Outstanding business loans, including buying assets, in Rs the person and Amount lended to others by the person or spouse in Cash savings the person or spouse have in Total hours worked in a month Whether the family has migrants (excluding respondent) Whether they have formal business

14 Outcome during follow up: random assignment (voc training) Statistical significance Variables Mean Std. Dev. Mean Std. Dev. Control (114) Treatment (347) Person is gainfully employed (home cultivation is counted as employed) in *** Person is gainfully employed (home cultivation not counted as employed) in *** Whether the persons own the business in Monthly profit of those who own the business in Person's monthly income last month in Amount received from remittance Non food expenditures including legal costs, tobacco and alcohol in Repair work/extension work expenses on home in Outstanding loans in Rs the person and spouse have in Outstanding business loans, including buying assets, in Rs the person and Amount lended to others by the person or spouse in Cash savings the person or spouse have in Total hours worked in a month Whether the family has migrants (excluding respondent) Whether they have formal business

15 Outcome during follow up: training provider selection (voc training) Variable Mean Std. Dev. Mean Std. Dev. Control (139) Treatment (373) Person is gainfully employed (home cultivation is counted as employed) in *** Person is gainfully employed (home cultivation not counted as employed) in *** Whether the persons own the business in ** Monthly profit of those who own the business in ** Person's monthly income last month in ** Amount received from remittance Non food expenditures including legal costs, tobacco and alcohol in Repair work/extension work expenses on home in Outstanding loans in Rs the person and spouse have in Outstanding business loans, including buying assets, in Rs the person and ** Amount lended to others by the person or spouse in Cash savings the person or spouse have in Total hours worked in a month *** Whether the family has migrants (excluding respondent) Whether they have formal business Statistical significance

16 Outcome during follow up: random assignment (entrepreneurship training) Mean Std. Dev. Mean Std. Dev. Control (127) Treatment (304) Person is gainfully employed (home cultivation is counted as employed) in *** Person is gainfully employed (home cultivation not counted as employed) in *** Whether the persons own the business in *** Monthly profit of those who own the business in Person's monthly income last month in *** Amount received from remittance Non food expenditures including legal costs, tobacco and alcohol in Repair work/extension work expenses on home in Outstanding loans in Rs the person and spouse have in * Outstanding business loans, including buying assets, in Rs the person and Amount lended to others by the person or spouse in Cash savings the person or spouse have in Total hours worked in a month *** Whether the family has migrants (excluding respondent) ** Whether they have formal business *** Statistical significance

17 6. Preliminary findings Results similar even with intent to treat analysis Generally positive impact of entrepreneurship training in many outcomes of interest Generally impact of vocational training is statistically insignificant when trainees were randomly assigned Trainees are more likely of getting gainfully employed. Those participating in entrepreneurship training are more likely to start new business There is positive impact of entrepreneurship training to females as well

18 7. Next steps Control group more likely to be dropped out (attrited) in the follow up survey Lee bounds to address differential attrition; trim some data from treatment group to be done Estimating selection bias in trainee selection by the training provider More heterogeneous impacts of entrepreneurship and vocation training

19 Discussion Given that vocational training in this study is limited to extremely poor households, they are more likely to encounter problems in finding jobs. In Nepal, more focus on vocational training and less on entrepreneurship Vocational training: short duration Entrepreneurship: intense support needed Role of incentives Further work still needed to be conducted T & Es may not necessarily incur loss in the present context Impact of life skill training

20 Thank you!