Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/269941 
Authors: 
Year of Publication: 
2020
Citation: 
[Journal:] Cogent Economics & Finance [ISSN:] 2332-2039 [Volume:] 8 [Issue:] 1 [Article No.:] 1791546 [Year:] 2020 [Pages:] 1-13
Publisher: 
Taylor & Francis, Abingdon
Abstract: 
A large share of workers in developing countries are constrained to self-employment mainly due to lack of opportunities in wage employment, becoming entrepreneurs de facto constrained to the informal sector, with meager profits and poor working conditions. In response to this problem, several governments offer business training programs targeted at these entrepreneurs with two aims: to improve business outcomes and to promote enterprise formalization. This paper explores the relation between business training programs and formalization using data of 1,133 participants in two entrepreneurship programs in Peru. Difference-in-differences with various matching techniques indicate that formalization increased by 20-25 percentage points 2 years after program participation. This study presents suggestive evidence of three potential mechanisms behind this increased formalization rates: the opportunity to reconsider participants' original business plans, the demystification of the tax procedures, and access to seed capital.
Subjects: 
entrepreneurship
microenterprise formalization
training
JEL: 
M13
M53
O12
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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