Starting points matter: Cash plus training effects on youth entrepreneurship, skills, and resilience during an epidemic

Abstract

This paper examines the impact of a “cash plus” intervention on youth entrepreneurship and skills formation during the Ebola crisis in Sierra Leone, using evidence from a randomized control trial. The intervention combined a regular stream of modest cash injections with training in either technical skills, business skills, or a combination of these two types of training. The results suggest that such interventions can build resilience to aggregate shocks by increasing employment and entrepreneurship, building cognitive and non-cognitive skills, and protecting household consumption and investments. However, results are heterogeneous. Youth with higher initial noncognitive skills experienced positive labor market and entrepreneurship impacts, while weaker noncognitive ability, poorer youth upgraded skills more extensively, but channeled benefits into more consumption. The findings confirm the age-malleability of noncognitive skills and suggest that, in low-ability contexts, the sensitive years for skill investments may reach into early adulthood. They also highlight dynamic policy trade-offs in productivity gains and poverty reduction and indicate the relevance of noncognitive measures for targeting.