Making Entrepreneurs: The Return to Training Youth in Hard versus Soft Business Skills | CEDIL research project paper 11

We study the medium-term impacts of the Skills for Effective Entrepreneurship Development (SEED) program, an innovative in-residence 3-week mini-MBA program for high school students modeled after western business school curricula and adapted to the Ugandan context. The program featured two separate treatments: the hard skills MBA features a mix of approximately 75% hard skills and 25% soft skills; the soft skills curriculum has the reverse mix. Using data on 4,400 youth from a nationally representative sample in a 3-arm field experiment in Uganda, the 3.5 year follow-up demonstrated that training was effective in improving both hard and soft skills, but only soft skills were directly linked to improvements in self-efficacy, persuasion, and negotiation. Youth in both groups were more likely to start enterprises and more successful in ensuring their businesses’ survival. The program led to significantly larger profits (27.8% and 34.8% for hard and soft treatment arms respectively) and larger business capital investments (72.5% and 58.8% for SEED hard and SEED soft, respectively). Relative to the control group, SEED entrepreneurs created 550 new businesses and 985 additional jobs. The individual’s skill upgrade was rewarded by substantially higher earnings; 38.7% and 21.2% increases in earnings for those who attended hard- and soft-training, respectively, largely generated through self employment. Both SEED curricula were very cost-effective; one (two) month’s worth of extra earnings as a direct consequence of having attended the SEED hard (soft) program would exceed its total cost. 8.5 years post intervention, businesses led by SEED graduates are still more profitable than enterprises owned by the control group. To put these effect sizes into perspective, the control group would need to work 27.2 months and 16.25 months to match the business earnings accrued in a typical year by SEED hard and SEED soft graduates, respectively. Suggested citation: Chioda, L., Contreras-Loya, D., Gertler, P. and Carney, D. 2023. Making Entrepreneurs: The Return to Training Youth in Hard versus Soft Business Skills, CEDIL Research Project Paper 11. Centre of Excellence for Development Impact and Learning (CEDIL), London and Oxford. Available from: https://doi.org/10.51744/CRPP11