Why Do People Stay Poor?

Can Microfinance Unlock a Poverty Trap for Some Entrepreneurs?

“…Our paper joins two contemporary studies presenting evidence of non-convexities and poverty trap dynamics in di erent settings. Balboni et al (2018) find evidence consistent with poverty traps among the ultra-poor in Bangladesh, following up on the evaluation of a large productive asset transfer analyzed in Bandiera et al (2017). Kaboski et al (2019) also investigate the possibility of non-convexities in an experiment in which Ugandan households were given a choice over riskier vs. safer lotteries.…”

With or without him? Experimental Evidence on Gender-Sensitive Cash Grants and Trainings in Tunisia

“…and Shapiro 2016, Crépon et al 2020, Kondylis et al 2021. Our study also directly contributes to the nascent literature on multi-faceted programs that tackle multiple constraints at the same time (Banerjee et al 2015;Bedoya et al 2019;Sedlmayr et al 2020;Banerjee et al 2021;Bossuroy et al 2021;Balboni et al 2021). Second, our analysis sheds new light on the gender-specific constraints that women face in the labor market (see Duflo 2012 and Jayachandran 2021 for reviews).…”

Skills and Liquidity Barriers to Youth Employment: Medium-term Evidence from a Cash Benchmarking Experiment in Rwanda

“…Sub-Saharan Africa combines a rapidly growing population with low formal-sector employment, meaning that future economic growth will be largely dependent on enhancing productivity in the informal sector (Bandiera et al, 2022). In this context, few questions have greater long-term import than how best to help the burgeoning young population achieve a successful transition into a productive adulthood (Bongaarts, 2016;Fox et al, 2016).…”

“…While skills are almost certainly a constraint for a population with the lowest average schooling levels in the world, entrepreneurship and job training programs have an uneven record in contexts with little formal employment (Kluve et al, 2017;McKenzie, 2021). Credit constraints also certainly play a role, but while a large literature has shown that cash transfers are invested in productive assets in the short term (Blattman et al, 2013;Gertler et al, 2012;Haushofer and Shapiro, 2016;De Mel et al, 2012), the ability of transfers to affect durable improvements in productivity is more uncertain (Aizer et al, 2016;Baird et al, 2019;Balboni et al, 2022;Blattman et al, 2018;Brudevold-Newman et al, 2017;Hoynes et al, 2016). More broadly, it is possible that macro-level constraints to demand or to the scope for business expansion fundamentally limit the extent to which the informal sector can provide a pathway out of poverty (La Porta and Shleifer, 2014).…”

“…Serious questions about the durability of the informal sector as a pathway to long-term security have been raised by the Covid-19 epidemic, which has dealt a huge shock to self-employed individuals with income streams vulnerable to lockdowns and without access to employer-based safety nets (Egger et al, 2021;Mahmud and Riley, 2021). Since the ability to affect long-term impacts requires the ability to weather shocks (Balboni et al, 2022), the durability of impacts through the Covid-19 epidemic speak both to the dynamics of wealth accumulation and also to the resiliency of different forms of shocks to wealth.…”