Evidence from Uganda shows that entrepreneurship skills can prepare rural women for economic shocks

The views expressed in the Let’s Talk Development blog are solely those of the author(s).

Programs teaching entrepreneurship skills often aim to help microenterprises grow into small or medium enterprises to accelerate private sector development. However, such programs could carry an added benefit: enhancing women’s economic inclusion. Can providing rural women in Uganda with basic entrepreneurship skills help them supplement their income, become more economically integrated in their communities, and become more resilient to economic shocks?

Our study reports on the results of a randomized control trial conducted from 2018 – 2021 with nearly 1,000 low-income, rural women in Central Uganda. The entrepreneurship skills were taught by an NGO that spent years developing a curriculum designed for women with low levels of literacy and little income. Unlike many other programs, the program in the study is purely skills based. They do not provide access to capital or loans. Instead, they teach women strategies for raising capital, identifying business opportunities, caring for customers, and setting goals for their businesses.
 

Expanded Economic Opportunities and Inclusion

The results of the study show the program expands economic opportunities for women:

• After the program, women who participated are 12% more likely to own a business and own 24.5% more businesses than women in the control group.
• They are also 17% more likely to be earning profits from their microenterprises.
• The program also generated positive knowledge gains in both soft and hard skills. Women who attended engage more proactively in price management, are more likely to have goals for their microenterprises, and they exhibit higher levels of grit, or persistence.

These all suggest that the program is successful at enhancing inclusion by helping women add microenterprises to their portfolio of economic activities.
 

Unplanned Secondary Effect: Increased Economic Resilience

By chance, our study spans Uganda’s COVID-19 lockdowns. This allowed us to achieve a better understanding of program impacts on women’s economic resilience, or their ability to weather economic shocks.

The lockdown severely impacted women in the control group. On average, their revenues were around 40% lower during the lockdown than they were prior to the lockdown. Surprisingly, the women selected to participate in the program saw no drop in revenues during lockdown.

How did the program foster economic resilience? Anecdotally, there were two key factors. First, the skills-based nature of the program was key. Participants had started businesses using only the skills they learned in the program, so they knew they could do it again when they faced a shock. Second, the program emphasized searching for market niches to fill. Combined, these two lessons helped women quickly pivot to businesses that they could continue to run when faced with the economic shock of COVID-19.
 

Lessons for Inclusion

By applying entrepreneurship training to a low-income population of women, our study highlights the importance of seemingly simple skills for women’s economic inclusion. It also shows that skills can help protect women’s livelihoods from economic shocks, helping preserve progress towards women’s economic inclusion. As governments and NGOs design programs in an increasingly volatile world, incorporating elements that promote resilience will be critical for ensuring sustained gains for women.

^{This study contributes to our understanding of the constraints and policy options to facilitate jobs for women in low- and middle-income settings.  This work is part of the body of research underpinning the World Bank’s Center for Research on Women and Jobs, a research initiative led by the World Bank's Development Research Group in collaboration with the Bank's regional Gender Innovation Labs and other key partners to coordinate policy research efforts on women and jobs.}