Lessons for microenterprise programs from a fresh look at the unemployment insurance self-employment demonstration

Microenterprise programs aim to foster self-employment among the poor, those on welfare, and the unemployed. The only experimental test of their impact is the Unemployment Insurance Self-Employment Demonstration (UISED). UISED did shorten unemployment spells, but most other impacts were small and the most disadvantaged did not choose to participate. Although UISED provides some weak evidence that long-term income support, long-term work-search waivers, and on-call advice may increase total employment (but perhaps not self-employment) more than capital infusions and up-front classes, UISED does not reveal the best design for microenterprise programs or whether such programs are good social investments.