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The Role of Hard and Soft Skills in Entrepreneurial Success: Experimental Evidence from Uganda

Development Challenge

Youth unemployment is an acute problem in low-income countries, including many in sub-Saharan Africa. [1] Young people account for 60 percent of the unemployed in this region, and 72 percent of young people between the ages of 15 and 24 in sub-Saharan Africa live below the US$2 a day poverty line. [2] A lack of necessary skills is often cited as contributing to high unemployment, but there is little evidence as to which types of training can lead to positive outcomes.

For youth in particular, labor market and fertility outcomes can be related.  For example, the perception of future labor market opportunities can affect the timing of childbearing.  Yet there exists little rigorous evidence on how to help youth delay early childbearing.

Many sub-Saharan national governments have integrated entrepreneurship training into high school curricula. However, these programs are primarily based on hard skills (i.e. accounting, finance, and strategy) and ignore the potential contribution of soft skills (i.e. communication, negotiation, and decision-making).

In this evaluation, researchers are investigating the role of hard versus soft skills entrepreneurship training on the business success, labor market, psychological well-being, and fertility outcomes of Ugandan youth.  With respect to reproductive health, researchers hypothesize that hard skills can improve youth’s optimism about the future and thereby may lead to a delay in childbearing.  Additionally, soft skills may provide youth with the tools needed for better negotiation of planned childbearing with their partner and may help girls and young women avoid pressure that could lead to unintended pregnancy.

Context

In Uganda, many youth lack formal business skills, are unemployed or underemployed, and rely on income from small enterprises. Youth encounter numerous challenges entering and succeeding in the labor market, including early marriage and childbearing.  As a result, there is significant potential to increase economic growth and employment by increasing the number of workers with the knowledge necessary to enhance business practices and expand opportunities.

The Ugandan government is mainstreaming entrepreneurship training in high school curricula to better equip students with relevant labor market skills. Researchers partnered with the Uganda Ministry of Education, International Labor Organization (ILO), and Educate!, a local NGO specializing in entrepreneurship, to develop a high-quality, three-week in-residence program based on a standard MBA curriculum and adapted to the Ugandan environment. The study tests which type of skills (hard versus soft) best prepare graduating high school students for the labor market, and which skills can improve reproductive health outcomes, in terms of delayed and better spaced childbearing and contraception use.

Evaluation Strategy

Researchers randomly selected 4,400 students from a pool of 7,436 applicants and assigned them to one of five treatment groups (see table). Two groups (1,600 students total) received a curriculum focused more on hard skills than soft skills (75% vs. 25%); two groups (1,600 students) received the reverse. The fifth group (1,200 students) was a pure comparison and did not participate in any entrepreneurship training.

Treatment Group

1

2

3

4

5

Curriculum

75% Hard Skills: accounting, generating a business idea, selecting a market, funding a business, investment, financial statements, cash flows, hiring and managing people

75% Soft Skills: communication, judgment, networking, public speaking, risk taking, self-management, goal setting, group decision making, leadership and teambuilding

No training

Reproductive Health Module

Reproductive Health module

The reproductive health module used cognitive behavioral therapy (CBT) to help students incorporate their professional goals with their plans to start a family. The training was designed to help students assert their needs, control emotions and drives, negotiate, delay gratification, and focus on their own goals. It utilized interactive exercises and role-playing to cover topics such as sexual relationship dynamics, assertiveness, risk-taking, and information about reproductive health and family planning services.

Individual students completed a skills test before and after the training to measure its short-term effectiveness. Researchers will track the students via phone and in-person interviews as they continue post-secondary education and enter the labor market to capture long-term impacts.

Results and Policy Implications

Three and half years later, researchers followed-up with students to collect data on hard and soft skills, labor market and business outcomes, and psychological measures of well-being.

Specifically, reproductive outcomes measured included desired and actual number and timing of children, contraceptive use, marriage, and beliefs about the role of women in child rearing and work. Researchers also tested psychological and behavioral outcomes such as feelings of power and stress, risk-tolerance, time preferences, and negotiation skills. Additionally, the follow-up surveys measured professional outcomes such as university admissions and success, employment, entrepreneurial activities, and writing skills. 

Results forthcoming.

Timeline

2013-2017

[1] Filmer et al. Youth Employment in Sub-Saharan Africa. Washington D.C.: World Bank Group, 2014.

[2] World Bank Africa Development Indicators 2008/09: Youth and Employment in Africa. Washington D.C.: World Bank, 2009. 

Photo Credit: Educate!, implementing project partner