Generating Growth in Microenterprises: The Transition from Non-Employer to Employer

This Research project examined the growth process of male microenterprises. Baseline and six-monthly follow-up surveys of around 1500 male enterprise owners in 18 Divisional Secretariat divisions in 9 districts. Contributed to design and managed translation of questionnaires. Three Interventions were administered:

(1) a matched savings programme (in partnership with a national-level savings bank)
(2) an ILO-developed business training programme (in partnership with a business consulting firm)
(3) an employment incentive programme to randomly selected enterprises.   

This survey project was supplemented by a larger annual follow-up survey of microenterprises, SME enterprises and wage workers in 31 DS divisions in 20 districts.


“Wage Subsidies for Microenterprises”

Wage subsidies have long being used by governments as part of their active labour market policies to generate employment for the disadvantaged or to sustain employment in downturns. In the context of developing economy labor markets where half or more of the labor force is employed in enterprises with fewer than five employees, similar motivations can be given for making short-term wage subsidies to microenterprise owners to encourage them to make the leap to hiring workers. In this short paper we describe the implementation and take-up of a randomized experiment in Sri Lanka motivated by these ideas. It is, to our knowledge, the first program to offer wage subsidies to microenterprises.

Published in American Economic Review: Papers & Proceedings, Vol. 100, No. 2, May 2010, pp. 614-618. (downloadable from

 A previous version is available at the World Bank website and downloadable from