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Experimental evidence on occupational choices of microentrepreneurs in Mozambique

The role of technology, financial resources and business skills in microenterprise development in Mozambique

Project Info

Principal Investigators

Cátia Batista (Nova SBE)
Priscila Oliveira (Nova SBE)

Funding

International Growth Center (IGC)

About this Project

Micro-entrepreneurs compose a large share of the economy of low- and middle-income countries. Despite being the main source of income for millions of households, most micro-firms do not grow over time, do not create jobs and often have very low productivity and profitability. In this study, we aim to understand novel mechanisms underlying micro-entrepreneurs’ decision to keep operating subsistence-level firms, despite their low profitability. This project implements an experimental impact evaluation focused on understanding the role of information constraints and biased beliefs about business performance and job prospects on the occupational choices of micro-entrepreneurs in urban areas in Mozambique. The results of this project can also help to inform and design future policies that may reduce misallocation of talent into entrepreneurship.

Contributing to SDGs: