The Economics of Women s Entrepreneurship: Evidence from Building Skills in Uganda

In contexts where women have few opportunities for wage work, entrepreneurship may be one of the only avenues for economic inclusion. However, women-owned businesses are often less profitable than their male-owned counterparts, and many microenterprises do not grow. Can removing skills-based barriers to productive entrepreneurship increase women’s incomes and, if so, what happens when women become productive entrepreneurs? We randomize a program targeting ultra-poor women in Uganda that promotes business and entrepreneurship skills development. Removing these barriers generates large effects on business creation and increases profits by 105% relative to control. Treated women heavily re-invest their profits, spending only 23% on household consumption. As a result, we detect no effects on household welfare within our study period. However, we document significant, positive spillovers to other women and children in the community. Our results highlight the importance of skills-based constraints to productive entrepreneurship while pointing to remaining barriers to private sector development.