Does the Small Business Programme Benefit Self-Employed Workers? Evidence from Nicaragua

Business and skills training programmes have been a popular social policy intervention to promote self-employment and improve its performance in developing countries. We study the Small Business of the Family Economy (SBFE) programme, a government business training programme designed to support self-employed workers in Nicaragua. With data from three survey rounds of the Nicaragua Living Standards Measurement Survey, we use a difference-in-differences strategy exploiting variation across time and industry in terms of eligibility to the programme. Our estimates suggest that the SBFE programme does not increases self-employed workers’ income overall but we find strong heterogeneous treatment effects for female self-employed workers with low educational attainment, which could be channeled by formal business training, working months, and having a second job.