Designing the most effective bundle of services to help clients achieve economic well-being outcomes

This randomized control trial gives us an opportunity to generate relevant evidence for crisis contexts and develop better guidance for humanitarian actors.

Co-authored with Kimberly Behrman

For refugees and vulnerable people around the world, finding a stable income is a priority so they can support their families. In prolonged crises, the need for sustainable livelihoods is even more pressing. Refugees in particular face challenges in accessing opportunities in the labor market, including legal barriers, language obstacles, and limited networks. Without access to safe and decent work, people are unable to thrive and contribute to local economies. In International Rescue Committee’s (IRC) economic recovery and development programming, we aim to support people to establish sustainable livelihoods. However, we often face three key challenges:

1. We have some rigorous evidence on program approaches that work in certain contexts, but often not specific evidence on what works for refugees and other vulnerable populations in humanitarian settings
2. We know the types of programs that work — like skills training and business grants — but we do not know the specific combination or dose of services to get the best results. For example: How much training? Does mentoring help or are trainings and grants enough?
3. We separately have information on the evidence and how much it costs us to deliver employment-related services, but don’t always know how to evaluate impact relative to cost.Is the impact of business skills training strong enough (relative to other similar interventions) to justify $X worth of costs?

The IRC is collaborating with Georgetown University’s Initiative on Innovation, Development and Evaluation (gui2de) at the McCourt School of Public Policy to conduct a randomized controlled trial (RCT) in Nairobi, Kenya, to help us answer some of these key and pressing questions. Closing this knowledge gap will ultimately enable us to achieve better outcomes for our clients. We aim to look at the impact and cost-effectiveness of business grants, business skills training, and coaching and mentoring services for entrepreneurs. Our goal is to better understand the right bundle of services to deliver to clients who are receiving microenterprise support to achieve outcomes that improve their economic well-being.

Can we do more with humanitarian cash assistance?

Bundled services is the IRC’s approach to delivering multiple livelihoods services together to help clients improve their income earning potential and accumulate assets. Services commonly include business grants, skills training, linkages to private sector actors through apprenticeship and internship programs, mentoring, and financial inclusion strategies like Village Savings and Loans Associations. The IRC uses this approach around the world, especially through livelihoods centers established in East and West Africa, and the Middle East. A Livelihoods Center is a one-stop shop for clients interested in finding a job or starting a business, where they can be connected to many of the services mentioned above.

The RCT focuses specifically on the microenterprise track offered at IRC’s Livelihoods Resource Centers in Nairobi. The microenterprise track offered by the IRC aims to address a number of barriers that clients may face through comprehensive services including:

1. Literacy and numeracy training (if needed, administered as prerequisite to enrollment)
2. Business skills training (Learn to Earn)
3. Participation in a Village Savings and Loans Association (VSLA)
4. Capital for business in the form of a business grant (cash)
5. Coaching & mentoring

The design of the microenterprise track is grounded in evidence that suggests programs, particularly for youth and women, should be designed to address the multiple barriers that entrepreneurs face in order to be impactful. However, much of the evidence is from stable contexts and it is unclear how well the evidence from middle-and low-income countries, focusing on citizens, translates to fragile contexts and the refugee population. The evidence that does exist from fragile contexts suggests that “capital centric” interventions such as business grants, are promising. With the evidence in mind, within IRC’s microenterprise track, the literacy and numeracy skills and the business skills training (Learn to Earn) address the barrier related to insufficient skills to manage a business. The business grant, and to some extent participation in the VSLA, addresses access to capital constraints, which are particularly acute for refugees. And the coaching and mentoring provides market related advice needed to cope with the ongoing challenges of starting a business without a network of support.

Designing for vulnerable communities in Jordan

This RCT provides us an opportunity to generate relevant evidence for crisis contexts and will allow us to develop better guidance for humanitarian actors. More specifically, the RCT aims not only to evaluate the impact of a program that provides a combination of business skills training, coaching, and mentoring, but also to understand the contribution of its components and their impacts compared to cash grants of a similar value. In addition to this, we are exploring clients’ willingness to pay for services to determine the monetary value that clients place on IRC services offered.

Between August 2019–2020, the IRC team in Kenya will deliver three versions of the microenterprise track to clients in Nairobi county to understand the impact and cost-effectiveness of each track as compared to the others and to a control group.

Georgetown University’s gui2de team will conduct a baseline and an endline survey to capture the short-term (1 year) impact of the interventions. We are very excited to test these different approaches, and look forward to learning and sharing with others on the most cost-effective combination of services to improve economic outcomes for refugees and highly vulnerable populations.