Lessons for Microenterprise Programs from a Fresh Look at the Unemployment Insurance Self-Employment Demonstration

Publication Date: Jun 1999
Published by: Microfinance.com
Document Type: Paper

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Are micro enterprises a good usage of public funds?

This paper presents the study conducted by The Unemployment Insurance Self Employment Demonstration (UISED) to gauge the success of the micro enterprise programs in self employment of the poor.

The paper studies the implementation of UISED's micro enterprise programs in two different states. It finds that the difference in program design in the two states led to a difference in impacts on self employment, wage employment and total employment.

The paper summarizes the conclusions drawn by UISED:

• The success of micro enterprises depends upon the design of the program.
• Self employment assistance is a cost effective approach.
• Financial assistance is neither necessary nor sufficient for success in self employment.

• The test conducted by UISED is not conclusive.
• It is premature to say that micro enterprises are a good use of scarce public funds.
• Further studies of the micro enterprise program are needed to evaluate their success.