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Growing America through entrepreneurship: Final evaluation of Project GATE. (Benus et al. 2009)

Citation

Benus, J., Shen, T., Zhang, S., Chan, M., & Hansen, B. (2009). Growing America through entrepreneurship: Final evaluation of Project GATE. Washington, DC: IMPAQ International.

Highlights

  • The study’s objective was to examine the impact of the Growing America Through Entrepreneurship (Project GATE) demonstration project, which offered entrepreneurship training and business counseling to low-income individuals, on participants’ employment and earnings.
  • The authors randomly assigned study participants to a treatment group, which could participate in Project GATE, or a control group, which could not participate. The authors collected information from all participants through follow-up surveys 6, 18, and 60 months after random assignment.
  • The study found that Project GATE increased the likelihood of business ownership in the second and third quarters after random assignment. The study found few statistically significant impacts on employment or earnings over the 60-month follow-up period, though generally the Project GATE participants were slightly less likely than the control group members to be employed in later follow-up periods.
  • The quality of causal evidence presented in this report is high for outcomes measured in the first two quarters after assignment because these outcomes were based on a well-implemented randomized controlled trial. However, outcomes measured at other follow-up points present low causal evidence because of high attrition and insufficient adjustment for differences in previous employment and earnings history.

Intervention Examined

The Project Growing America Through Entrepreneurship (GATE) Demonstration

Features of the Intervention

Project GATE was a demonstration project that operated in Philadelphia and Pittsburgh, Pennsylvania; Minneapolis–St. Paul and northeastern Minnesota; and three cities in Maine from fall 2003 to summer 2005. It was open to anyone older than 18 who resided in one of the participating sites and had a business idea. Applicants had to provide information on their personal characteristics and business idea. Very few people were denied participation based on their business idea or their qualifications for starting a business.

As part of the demonstration, the authors randomly assigned 2,095 Project GATE applicants to a treatment group that could participate in the project and 2,103 applicants to the control group that could not participate in Project GATE (but could access other employment services available in the community). Members of the treatment group underwent an assessment interview with a Project GATE assessment counselor and together they selected the most appropriate services to meet the participant’s self-employment needs. The counselor referred the participant to an appropriate service provider—a One-Stop Career Center, nonprofit community-based organization, or small business development center—that offered entrepreneurship training, one-on-one business counseling, and help applying for business loans.

The authors then contacted all study participants for follow-up surveys about their self-employment; wage and salary employment; and earnings 6, 18, and 60 months after random assignment. The authors compared the outcomes of treatment and control group members in each quarter following random assignment.

Findings

Employment

  • The study found that Project GATE increased the likelihood of business ownership during the second and third quarters after random assignment, but that did not persist to later quarters.

Earnings

  • In the first two quarters after random assignment, Project GATE participants earned significantly less than control group participants did. However, there were no statistically significant differences between the groups in earnings in later quarters.

Considerations for Interpreting the Findings

The study included three follow-up surveys. The six-month survey sample had low attrition and the outcomes received a high causal evidence rating. However, subsequent follow-up survey samples had high attrition and were reviewed as nonexperimental designs. For employment and earnings outcomes measured by the 18- and 60-month surveys, the authors did not account for differences in previous employment and earnings between the Project GATE members and the control group members. These existing differences between the groups—and not Project GATE—could explain the observed differences in outcomes. As a result, the employment and earnings outcomes from the 18- and 60-month surveys received low causal evidence ratings.

Causal Evidence Rating

The quality of causal evidence presented in this report is high for outcomes measured in the first two quarters after random assignment because these outcomes were based on a well-implemented randomized controlled trial. This means we are confident that the estimated effects for these outcomes in these quarters are attributable to Project GATE, and not to other factors. However, outcomes measured at other follow-up points present low causal evidence because of high attrition and insufficient adjustments for previous employment and earnings history. This means we are not confident that the estimated effects are attributable to Project GATE; other factors are likely to have contributed.

Reviewed by CLEAR

December 2016