HIGHLIGHTS

• Successfully starting and growing a business is challenging, especially for people in low- and middle-income countries.
• We partnered with the World Bank and Government of Liberia to design behaviorally informed solutions that support female entrepreneurs.
• An evaluation found that behavioral interventions—particularly those leveraging role models—can increase the likelihood that women will consider opening businesses in non-traditional fields.

The Challenge

Liberian youth have long faced high levels of unemployment and underemployment. The civil war and Ebola outbreak over the previous two decades negatively impacted economic outcomes, while the COVID-19 pandemic only exacerbated unemployment and hurt small businesses. To support youth in increasing economic activity and building resilience, the Government of Liberia and the World Bank created the Youth Opportunities Project (YOP). The YOP comprised of resources that support potential entrepreneurs, including business training and a business grant for Liberian youth to start and grow their own businesses. However, while many youth joined the program and had a stated goal of opening a business, about 40% of participants dropped out and did not successfully open businesses. 

Successfully starting and growing a business from scratch is incredibly challenging, especially if the business is in a sector seen as culturally untraditional for the entrepreneur. This project illustrates that insights from behavioral science can inform light-touch solutions that support youth along the journey of preparing for, opening, and growing their own business.

Our Approach

To better understand the factors that may be driving low participation in technical training and workplace learning programs, we partnered with an organization in Rwanda to conduct a deep dive into the Rwandan context. 

We partnered with the Government of Liberia and the World Bank to understand the challenges that people faced in persisting through the YOP. Following discussions with YOP program staff, trainers, and youth, we undertook a co-design process to create solutions informed by their feedback. We developed and tested a set of behavioral activities to be added into trainings, including tools that help entrepreneurs identify the best business sector, consider and mitigate challenges, and plan for the daily responsibilities of running a business. 

For women in particular, we found that it was challenging to start a business in a field that wasn’t traditionally seen as “appropriate.” In response, we designed an event for women where role models—or women in their community who opened businesses in non-traditional fields—shared their experiences and discussed challenges.

Results

In 2020, we ran a randomized controlled trial to assess the impact of the behavioral interventions. We found that the behavioral designs supported women to consider all potential sectors and to persist in growing their business. The businesses of women who received the behavioral designs were more likely to be open at the time of data collection, six months after the intervention, and data also suggested that women who received the designs were more likely to consider opening businesses in non-traditional fields. Overall, we did not find significant impacts on program drop-out, though 97% of businesses overall were still open at the time of data collection.

Takeaway

Interested in learning more about this work applying behavioral science to a crucial social problem? Email livelihoods@ideas42.org or reach out to us on X at @ideas42 to join the conversation.