Are Self-Employment Training Programs Effective? Evidence from Project GATE...

"This paper provides evidence on the efficacy of providing self-employment training services without any financial support to unemployed and other individuals interested in self-employment. For our analyses, we use data from Project GATE (Growing America Through Entrepreneurship), the most recent experimental design self-employment program implemented in the U.S.... The program, implemented from 2003 through 2005 in Maine, Minnesota, and Pennsylvania, included an outreach campaign for recruiting applicants, with designated One- Stop Career Centers serving as central points of recruitment. Project GATE offered an array of self-employment training services to a random sample of individuals who expressed a strong interest in self-employment. Unlike most programs implemented in the U.S. and elsewhere, Project GATE did not provide participants with any type of financial support, and it accepted applications from all interested individuals – unemployed, employed, self-employed, or not in the labor force. The program’s design provides a unique opportunity to examine the efficacy of providing self-employment training without any financial support to unemployed and other individuals interested in self-employment" (p. 1-2, 27). (Abstractor: Author)"The average Project GATE cost per treatment group participant was $859, which includes the amounts paid to service providers for program services and all other costs related to providing services to program participants" (Benus et al., 2009).

Full Publication Title: Are Self-Employment Training Programs Effective? Evidence from Project GATE [Growing America Through Entrepreneurship]

Based on the results from the survey, the author identifies a number of major conclusions: "• Our analyses show that Project GATE was effective in assisting unemployed participants start their own business and become self-employed soon after random assignment. As a result, in the early months following program entry, unemployed participants experienced significant gains in self-employment and in total employment. • The program also led to a substantial increase in the likelihood that unemployed participants were self-employed in a new business even 5 years after program entry, indicating that many of the businesses started by the unemployed were sustained for long periods of time. • Despite the program’s effect on the rapid reemployment of the unemployed through self- employment, we found no evidence that the program led to significant impacts on total earnings. Nevertheless, the average total earnings of unemployed applicants at 5 years after program entry were similar to the U.S. average, indicating that they were able to achieve self-sufficiency following program entry. • Further, given the strong preference that program participants expressed for self-employment, the higher levels of self-employment may well indicate greater job satisfaction for program participants. • Our impact analyses for participants who were employed, self-employed, or not in the labor force at the time of application, yielded substantially different results relative to the results for the unemployed. We find no evidence that the program had significant impacts on new business starts, self-employment, salary employment, or total employment for non-unemployed participants. There is also no evidence the program led to a significant impact on total earnings for these participants. Therefore, our analyses provide no evidence that self-employment training is an effective intervention for employed, self-employed, or not in the labor force individuals interested in self-employment" (p. 27-28). (Abstractor: Author)

• Last Updated:
• Created:
• Resource Publication Date: 2012
• Author(s): Benus, Jacob; Michaelides, Marios
• Organizational Author(s): IMPAQ International
• Funding Source: U.S. Department of Labor, Employment and Training Administration, U. S. Small Business Administration
• Resource Availability: Publicly available
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• Posted in: Workforce System Strategies