81312 enGender Impact: The World Bank’s Gender Impact Evaluation Database Employment Generation In Rural Africa: Mid-Term Results from an Experimental Evaluation of the Youth Opportunities Program in Northern Uganda Author(s) Christopher Blattman, Nathan Fiala and Sebastian Martinez Contact chrisblattman@columbia.edu Country Uganda Organizing Theme Economic Opportunities and Access to Assets, Voice and Agency Ongoing: baseline and mid-term completed; second stage data collection in 2012; need Status follow-up Intervention Category Cash Transfer Sector Social Development Can cash transfers promote employment and reduce poverty in rural Africa? Will lower youth unemployment and poverty reduce the risk of social instability? We experimentally evaluate one of Uganda’s largest development programs, which provided thousands of young people nearly unconditional, unsupervised cash transfers to pay for vocational training, tools, and business start‐up costs. Mid‐term results after two years suggest four main findings. First, despite a lack of central monitoring and accountability, most youth invest the transfer in vocational skills and tools. Second, the economic impacts of the transfer are large: hours of non-household employment double and cash earnings increase by nearly 50% relative to the control group. We estimate the transfer yields a real annual return on capital of 35% on average. Third, the evidence suggests that poor access to credit is a major reason youth cannot start these vocations in the absence of aid. Much of the heterogeneity in impacts is unexplained, however, and is unrelated to conventional Abstract economic measures of ability, suggesting we have much to learn about the determinants of entrepreneurship. Finally, these economic gains result in modest improvements in social stability. Measures of social cohesion and community support improve mildly, by roughly 5 to 10%, especially among males, most likely because the youth becomes a net giver rather than a net taker in his kin and community network. Most strikingly, we see a 50% fall in interpersonal aggression and disputes among males, but a 50% increase among females. Neither change seems related to economic performance nor does social cohesion ‐ a puzzle to be explored in the next phase of the study. These results suggest that increasing access to credit and capital could stimulate employment growth in rural Africa. In particular, unconditional and unsupervised cash transfers may be a more effective and cost‐efficient form of large‐scale aid than commonly believed. A second stage of data collection in 2012 will collect longitudinal economic impacts, additional data on political violence and behavior, and explore alternative theoretical mechanisms. Gender Connection Gender Informed Analysis Gender disaggregated income, consumption, labor force participation, participation or Gender Outcomes voice in community, psychological agency IE Design Clustered Randomized Control Trial (Unit of assignment was group-level) The Youth Opportunity Program was introduced in 2006 as part of the Northern Ugandan Intervention Social Action Fund, a development program that provided government transfers to Last updated: 14 August 2013 1 enGender Impact: The World Bank’s Gender Impact Evaluation Database communities for infrastructure, income support and livestock for the ultra-poor. The YOP program aimed to increase the economic opportunity and reduce violence for youth in Northern Uganda. Young adults formed groups that applied for funds that would pay fees at a local technical institution or provide funds and materials for producing craft. Once a group was selected, money was simply transferred into a banking account and there was no additional supervision. The average transfer was $374 per member, but transfer size varied based on the size of the group. The central government audited the groups for eligibility, and provided the grant to 270 out of 535 groups. Intervention Period The transfer was a one time transfer provided in 2008 There were 535 eligible groups that applied for the fund. 265 groups (5460 individuals) Sample population were selected to receive funds, the other 270 (5828 individuals) were the control group. Individuals in groups who received the transfer were compared to individuals in groups Comparison conditions who did not receive the transfer Unit of analysis Individual Level A baseline survey was conducted in Feb-March 2008, The training was complete by mid- Evaluation Period 2009, a follow up survey was conducted in August-March 2010/2011 24-30 months after disbursement The outcomes are split into three themes: Economic, Alienation, and Subjective Well- being. For each theme, the results are summed and presented as a z-score. The economic impacts are large with an increase in .28 standard deviations. The male and female economic impacts are similar. There are small impacts on alienation and aggregation, males are slightly less alienated by females actually report they are slightly more alienated. The Subjective well-being of the respondents increases by 14% compared to the control. Most Results of the beneficiaries actually make the investment they claimed they would make before the intervention; 2/3 of the transfer is spent on durable assets and fees. 17% of the control group entered a vocational training program while 70% of the treatment group entered a vocational school, enrollment rates do not differ significantly by gender. Leaders of groups do receive more training than the typical members. On average, monthly earnings increase by $9, which is a 45% increase over control group mean. Primary study limitations Funding Source Gender Action Plan, Uganda Social Action Fund, Spanish Impact Evaluation Fund Blattman, C., Fiala, N., & Martinez, S. (2012). Employment generation in rural Africa: mid- Reference(s) term results from an experimental evaluation of the Youth Opportunities Program in Northern Uganda. Link to Studies http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2030866 Microdata Last updated: 14 August 2013 2