The challenge
Uganda's government wanted to help poor and unemployed young adults in the conflict-affected north become self-employed artisans and raise their incomes.
The case
In 2006 the Government of Uganda added the Youth Opportunities Program (YOP) to its Northern Uganda Social Action Fund, inviting groups of about 20 poor young people, aged roughly 16 to 35, to apply for cash grants to start skilled trades such as metal fabrication or tailoring. Working with the government, Christopher Blattman, Nathan Fiala and Sebastian Martinez set YOP up as a randomized trial with more than 12,000 people in 535 eligible groups, 265 of which were funded in 2008. Treatment groups received unsupervised grants of $382 per member, investing some in skills training but most in tools and materials. After four years, half practised a skilled trade, and relative to the control group the programme increased business assets by 57%, work hours by 17% and earnings by 38%, with women's work and earnings taking off with the programme. But after nine years these gains had dissipated: grantees' investment levelled off, the control group eventually increased their incomes through business and casual labour, and both groups converged in employment, earnings and consumption.
Why it worked
The researchers conclude that the grants 'acted more as a kick-start than a lift out of poverty', though they had lasting impacts on durable assets and skilled work; at four years they found no effect on social cohesion, antisocial behaviour or protest.
Sources
- Blattman, C., Fiala, N., & Martinez, S. (2014). Generating skilled self-employment in developing countries: Experimental evidence from Uganda. Quarterly Journal of Economics, 129(2), 697–752.
- Blattman, C., Fiala, N., & Martinez, S. (2020). The long-term impacts of grants on poverty: Nine-year evidence from Uganda's Youth Opportunities Program. American Economic Review: Insights, 2(3), 287–304.
- Blattman, C., Fiala, N., & Martinez, S. (2018). The long term impacts of grants on poverty: 9-year evidence from Uganda's Youth Opportunities Program. NBER Working Paper 24999.
Spot an error or know a better source? Tell us