#2021-018 Does entrepreneurship increase the chances of the poor?
Does entrepreneurship increase the chances of the poor?
This paper investigates how entrepreneurship affects the likelihood of
households graduating out of poverty. It analyses the effect of
entrepreneurship in the outcomes of the households enrolled in the
Colombian poverty reduction programme. A contribution to the Capability
Approach is proposed with the inclusion of entrepreneurship as a
'functioning' linked to overcoming poverty. Entrepreneurship presents a
great potential given its multidimensional nature. In its more basic
conception, it is connected to income-generation, and in its more
complex conception, it is related to the concept of agency. Using the
Colombian UNIDOS programme (which is a programme focused on helping poor
graduating out of poverty) as a case study, we employ a Probit
Regression model with sample selection to model this mechanism. The
results present a positive, statistically significant impact of
entrepreneurial households in their probability of graduating out of
poverty. The results confirmed that entrepreneurial households show a
higher likelihood of escaping from poverty.
Keywords: Capability approach, poverty reduction, entrepreneurship, public policy, enterprise policy
JEL Classification: I31, I32, L26, J48, L53