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Is There a Cost-Effective Means of Training Microenterprises?

Author

Listed:
  • Wyatt Brooks
  • Kevin Donovan
  • Terence R Johnson

Abstract

Despite billions of dollars spent by policy institutions and academics, very few programs designed to increase managerial skills among microenterprises are cost-effective. This short paper highlights a mentorship program designed to provide managerial skills to Kenyan microenterprises, and it provides a detailed cost-benefit analysis. For each dollar spent on a treated firm, average profit increases by 1.63 USD; the result stems from both a higher program impact and lower cost relative to existing training programs. Motivated by this increased cost-effectiveness, the study then compares the program to the large literature focusing on “supply-side” interventions designed to increase managerial capacity in small firms, and it highlights particular margins on which mentorship improves on classroom training and also where training should focus.

Suggested Citation

  • Wyatt Brooks & Kevin Donovan & Terence R Johnson, 2020. "Is There a Cost-Effective Means of Training Microenterprises?," The World Bank Economic Review, World Bank, vol. 34(Supplemen), pages 63-67.
    • Handle: RePEc:oup:wbecrv:v:34:y:2020:i:supplement_1:p:s63-s67.
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    File URL: http://hdl.handle.net/10.1093/wber/lhz031
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    References listed on IDEAS

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    1. Nicholas Bloom & John Van Reenen, 2007. "Measuring and Explaining Management Practices Across Firms and Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(4), pages 1351-1408.
    2. David McKenzie & Christopher Woodruff, 2014. "What Are We Learning from Business Training and Entrepreneurship Evaluations around the Developing World?," The World Bank Research Observer, World Bank, vol. 29(1), pages 48-82.
    3. Wyatt Brooks & Kevin Donovan & Terence R. Johnson, 2018. "Mentors or Teachers? Microenterprise Training in Kenya," American Economic Journal: Applied Economics, American Economic Association, vol. 10(4), pages 196-221, October.
    4. David Atkin & Amit K. Khandelwal & Adam Osman, 2017. "Exporting and Firm Performance: Evidence from a Randomized Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 132(2), pages 551-615.
    Full references (including those not matched with items on IDEAS)

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