Are self-employment training programs effective? Evidence from Project GATE

In 2002, the U.S. Department of Labor and the Small Business Administration implemented Project GATE, an experimental demonstration program designed to provide free self-employment assistance to individuals interested in starting their own business. This paper uses data from Project GATE to examine the efficacy of public self-employment training programs in the modern U.S. economy. Our analyses show that GATE led to significant improvements in the post-training outcomes of treatment group participants who were unemployed at the time of application. Particularly, GATE had a significant positive impact on new business starts and sustainability for unemployed participants five years after random assignment. For those who were unemployed at random assignment, GATE also led to higher employment likelihood and higher total earnings five years after random assignment. GATE had no impact, however, for participants who were employed, self-employed, or out of the labor force at the time of application.