Promoting Entrepreneurship Among University Graduates: Evidence from Tunisia

Transcription

1 Promoting Entrepreneurship Among University Graduates: Evidence from Tunisia By Rita Almeida (HNDSP), Stefanie Brodmann (MNSHD), Patrick Premand (HDNCE), in collaboration with ONEQ June 7, 2011 Please do not quote without permission

2 The Problem: High Youth Unemployment with important social consequences! 23% among all higher education graduates (in 2009) And hits particularly young women Is quite persistent over time (reaching 46% 18 months after graduation) Key catalyst of the Tunisian Revolution. Unemployment rates by Education Levels 25% Higher 20% Secondary 15% Average 10% Primary 5% None 0%

3 Likely Reasons: Low Labor Demand and Skills Mismatches Constraints hindering graduates labor-market insertion: Labor Demand: Job-creation has not kept pace with growing numbers of university graduates. Creation of formal and open-ended jobs is severely constrained due to strict labor market regulations and high wage floors (collective agreements) Labor Supply: Lack of job relevant skills. Graduate curricula and education often criticized for not addressing private sector needs. And lack of relevant job experience. Queuing for public sector, high wage jobs.

4 A promising solution: Entrepreneurship Among Recent Graduates Challenge: Help the client design and evaluate an intervention that simultaneously: Addresses the problem of skills mismatches, by aligning the skills of recent graduates with those of the private sector; Fosters entrepreneurship among cohort of young graduates, by promoting their interest in setting up their own business (eventually creating jobs).

5 The Pilot Reform: Main Features Implementation of a national reform during academic year: All third year university students are offered the possibility to graduate by writing a business plan Participation: individually or in pairs Business Plan as an alternative to traditional thesis or internship Communication campaign through posters, professors, Enrolled students receive technical support to write a business plan: General training on entrepreneurial skills and enterprise creation (80 hours provided by ANETI) Tailored professional coaching (8h provided by experienced entrepreneurs) Supervision by university professors The carrot: Possibility of participating in a business plan competition (summer 2010), where winners receive start-up capital (50 winners)

6 Objectives of the evaluation Assist client in answering a set of core policy questions to inform program scale-up: Are students interested by entrepreneurship training? What is the profile of interested students? Does the intervention improve the employability (employment and self-employment), and earnings of university graduates? Who does the intervention benefit most? Is this a mass effective channel or would it be better to target it specific students?

7 Contribution to broader evidence-base A unique reform of the national education system, providing skills training to the more educated while still at university. Returns on such early interventions may be higher. Complements evaluation of skills training programs targeting already unemployed youth (eg. Card et al., 2007; Attanasio et al., 2008)), as well as literature on effectiveness of entrepreneurship training targeted to older unemployed or business owners (Almeida and Galasso, 2009; Karlan and Valdivia, 2009, Klinger and Schündeln, 2010). Contributes to thin evidence base on effective policies to foster selfemployment, which often focus on effectiveness of providing business grants or seed capital with less emphasis on skills training (McKenzie, 2009) Also adds to the literature on the profile of entrepreneurs (Harrison et al., 2006 ; de Mel et al., 2008).

8 Impact Evaluation Design 1920 Applicants (1702 eligible students, 1506 projects) Treatment Group (856 students, 757 projects) Block Randomization Control Group (846 students, 749 projects) No resources to reach all interested students Given over-subscription of interested students, randomized selection of 750 projects to participate in the pilot. Randomization conducted at project level stratified by gender and subject (15 groups of licences) In practice, imperfect compliance: 67% of selected students completed the training 40% of selected students submitted their business plan to the competition

9 Data Baseline Application Survey (online and paper, December 2009) Baseline Entrepreneurship Survey (phone, January February 2010) Capture broader range of characteristics, particularly on personal traits, preferences, attitudes towards entrepreneurship, 90% re-contact rate Qualitative work (October - November 2010) To finalize content of follow-up survey instrument and provide feedback on program implementation Follow-up survey (face-to-face; May-June 2011) On-going. Target is to reach 95% students. First labor-market survey after the revolution; only panel survey tracking the cohort of graduates.

10 Students had high expectations at baseline 88% of applicants expect program will facilitate labor-market insertion and 89% expect higher labor earnings. There are not enough jobs, the business plan competition is the only way. (A female participant from Gabes) My expectations were very high. I was going to fulfill my dreams. I was 100% sure to succeed. I thought that for once in my life I was given the opportunity to speak about myself, my objectives, and my aspirations in life. (A female participant from Gafsa)

11 Many students participate to realize an idea 80% 70% 60% 50% 72% 56% 40% 30% 29% 30% 20% 10% 12% 0% To realize a project idea By family tradition To have more flexibility By lack of salaried jobs To gain experience valuable to find a job 85% of applicants had a project idea at the time they applied.

12 Profile of applicants 2/3 of applicants are women. The mean applicant is approx. 23 years old, single, has a university score of 11.5/20, took previously an entrepreneurship course and has a good understanding of English (3/5). Come from middle-low income families (mean USD 300 / month). But one half has a father with at least secondary education. 71% of the applicants have had some LM experience, most of them in a seasonal activity (for mean duration of 6 months). For approx. 2/3 of applicants this professional experience related to the field of the proposed project, but only 25% have worked with a close relative / friend in a related business. Self report a high willingness to take risks (55% are risk takers ).

13 Randomization achieved balance C T Diff St. Err. Man 34% 33% Age Average in 2nd year Has w ork experience 69.7% 71.7% Has experience related to projet idea 61.0% 63.0% Know s a business ow ner 59.0% 63.1% Is w illing to take risk Household size Father is employed w orked 36.5% 33.6% Father is self-employed 27.5% 27.9% Mother is employed w orker 9.5% 9.5% Mother is self-employed 7.2% 8.2% Hh income betw een 0 and 300 DT 23.9% 25.1% hh income betw een 301 and 500 DT 30.1% 29.2% hh income betw een 501 and 800 DT 21.6% 19.5%

14 Range of outcomes measured in follow-up survey Core outcomes: Labor-Market Insertion, Employment, Quality of jobs, earnings Business creation Range of intermediary outcomes to assess how the intervention affected perceptions and aspirations on employability: Attitudes towards self-employment Entrepreneurial and Soft skills, personality traits and individual preferences Depression and aspirations for the future

15 Qualitative work suggestive of impacts on intermediary outcomes ( ) During the training, I lived in the skin of an entrepreneur. Now I feel like an entrepreneur. ( ) We worked on our personality. I learned to believe in myself, to value myself. I left aside my timidity, it was like a therapy. (A Female participant from Tunis) I have become more autonomous. ( ) I am more disciplined. (A Male participant from Carthage). Now I have more faith in myself. I know that any project will be hard, that it will not work immediately, but I am ready. (A male participant from Tunis) A young entrepreneur explained his success during the training. Now I want to do better than him. (A Male participant from Tunis) I have a new vision of the future. I have not realized my project yet, but in 5 to 10 years I will. (A Female participant from Tunis)

16 Some points for discussion Our objective is to re-contact 95% of applicants challenging! Given drop-out from intervention at various stages, analysis will need to account for non-compliance (ITT vs ToT analysis) The follow-up survey is the first labor-market survey after the revolution: a challenge for external validity? or an opportunity to measure graduates attitude towards seizing new opportunities and their attitudes for the future? Quantitative impact evaluation results will be available by the Fall