Global Workshop onDevelopment Impact Evaluation

in Finance and Private SectorRio de Janeiro, June 6-10, 2011

Presented byObert Pimhidzai - AFTP2, & Mattea Stein-

AFTDEwork done with

Bbira Bbosa-KASSIDA, Francisco Campos-AFTPM, Peter Dhamuzungu-PSFU, Markus Goldstein-AFTPM, Antoinette Schoar-MIT,

Bilal Zia-DECFP

KATWE SMALL SCALE INDUSTRY ASSOCIATION INFORMAL SKILLS TRAINING PROGRAMME - UGANDA

Informal sector biggest form of non-farm employment in Uganda

2ND LARGEST CONTRIBUTOR TO NET JOB CREATION IN UGANDA, 1992-2006

Wage Non wage

All -

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

Agriculture IndustryServices

PROJECTED TO CONTRIBUTE TO 25% OF NEW JOBS IN THE NEXT 10 YEARS

Wage employment - government

1%

Self-emp & unpaid family

workers - agriculture

40%

Self-emp & unpaid family worker non-agriculture

25%

Private wage employment -

agriculture4% Private wage

employment - non-agriculture

30%

….But productivity in the sector is limited

LOW CAPITAL, RUDIMENTARY TECHNOLOGY

POOR WORK ENVIRONMENT

….But productivity in the sector is limited

LOW CAPITAL, RUDIMENTARY TECHNOLOGY

POOR WORK ENVIRONMENT

…..will skills training improve productivity and raise the quality of employment in the sector?

In a 2009 study of micro enterprises in the informal sector, entrepreneurs reported these major constraints:

Inadequate access to capital

Low incomes and High risk of failure, 50% fail in first 3 years

Poor technical & business skills, general lack of knowledgeDifficult working environment – double taxation, harassment

Poor business strategy, low rates of return

Poor knowledge of the fee structure, regulations e.t.c.

InterventionKASSIDA SKILLS TRAINING

PROGRAMME

MANAGERIAL(Managers only-same course for all sectors, 24hours of training, 2hrs/day sessions, starts first

TECHNICAL (tailored to each of the 9 sectors – 44 hours of training, at model workshops, 2hr/day sessions

METAL FABRICATON

CAPENTRYCATERING

KNITTING & TAILORING

FOUNDRYFITTING & MACHINING

BARBER SHOPS AND SALOONS

SHOE MAKING

ELECTRICAL

BUSINESS PLANNINGMARKETINGFINANCIAL MANAGEMENT

Outcomes

Enterprise level

Employee level

Household levelImprovement in the standard of living of beneficiaries and their dependants

Efficiency in production•Reduced time taken to produce an item•Reduced cost of production•High product quality•Better workshop organization

Formality•Higher registration•Tax compliance

Firm Growth•Higher employment•Increased turnover•Higher profits

Marketing Skills & Innovation•Better Linkages and innovation in production•Broadening customer base

Opportunities &working conditions•Earnings•Started own business•Credit•Open bank account•Number of jobs offers (as a measure of recognition of improved capacity)

Increased knowledge•Technical methods•Safety practices

NETWORKING- Is new info/skills learned through the training diffuse through business networks? How? Magnitude of impact?

Design - issues

Selection process

796 workshops in 9 sectors applied to KASSIDA’s training

Workshops stratified by sector & grouped into clusters (within 20m) - 228 clusters of firms

identified

Similar clusters are paired according to size of cluster, sector, size of firms, personal

characteristics of entrepreneur.

of 114 clusters with 396 firms randomly selected to receive KASSIDA’s training

…..choosing a cluster

Implementation stages

Firm registration and Listing

Intervention

Baseline survey

Mini-follow up

End line survey

Descriptives from preliminary baseline data

SectorFemale owned

Workers(mean)

Workers (median)

Years of education

Owner Age

Has a business plan

Has an annual Budget

Keeps a ledger

Average monthly profit (USD)

Average Monthly turnover (USD)

Barbershops and Saloons 91.3 2.2 2.0 9.7 34.5 13.0 14.5 11.6

148

492

Carpentry 6.4 2.3 1.0 10.1 38.7 14.9 19.2 8.5

156

866

Catering 98.2 2.4 1.0 7.6 37.0 8.3 7.3 3.7

86

445 Fitting & Machining 0.0 2.9 3.0 12.4 48.1 7.1 50.0 7.1

2,868

8,060

Electrical 9.1 5.7 1.0 11.2 38.0 18.2 9.1 18.2

371

1,167 Foundry & Forgery 21.3 1.7 1.0 7.4 36.0 13.1 18.0 4.9

128

641

Metal fabrication 3.7 4.0 2.0 9.7 41.9 13.5 13.0 12.0

296

1,770

Shoe making 8.3 2.6 5.0 9.3 35.3 5.6 19.4 13.9

224

609

Tailoring 64.6 0.7 0.0 9.6 36.0 7.3 10.9 3.1

146

371

ALL 44.0 2.3 1.0 9.3 37.9 10.7 13.5 7.7

236

993

Major source of skills learning for the sector

Other

Self taught

Formal instutions

Friends and relatives

Apprenticeship (informal)

0 5 10 15 20 25 30 35

..as Uganda thinks about skills development….

Evidence from the IE valuable for the incorporation of informal skills training in the BTVET strategy!!! Intervention a potential solution to how

to effectively reach people in the informal sector who are currently excluded by the formal nature of BTVET