Project GATE: Growing America Through Entrepreneurship

Publications

Many individuals are motivated and capable of developing small businesses but lack access to credit or have little business expertise. Recognizing this untapped potential, the U.S. Department of Labor (DOL), Employment and Training Administration, initiated a demonstration to test ways of helping emerging entrepreneurs create, sustain, and/or expand their existing small business. Project GATE (Growing America Through Entrepreneurship) operated in seven urban/rural sites in three states—Maine, Minnesota, and Pennsylvania.

Almost anyone interested in starting or growing a small business was eligible to participate in Project GATE. Participants were offered an assessment of their business needs, classroom training, and one-on-one technical assistance in developing their business and applying for business financing. Nonprofit community-based organizations and the Small Business Administration’s Small Business Development Centers provided the services. Over 2,000 participants received entrepreneurial training and technical assistance.

Mathematica's evaluation addressed the following key questions:

• Can Project GATE be replicated on a larger scale? Was it implemented as planned? What were the prerequisites for effective implementation?
• Did the program work? Did Project GATE encourage development of new businesses? Did it increase self-employment, increase employment and earnings, and reduce receipt of unemployment insurance and public assistance? Did its effectiveness vary by how or in what context GATE was implemented? Did its effectiveness vary by population subgroup?
• Was the program cost-effective? Did the social benefits of the intervention exceed its social costs?

To address these questions, we designed and conducted process, impact, and benefit-cost analyses. The process evaluation involved collecting detailed information on program implementation through interviews with program staff, case studies of customers, observations of services, and focus groups with customers. It also involved an analysis of management information system data.

The impact evaluation included random assignment of about 4,200 GATE applicants into a program group and a control group. The program group received GATE services; the control group did not. The intake period, which began in fall 2003, ended in summer 2005. The impact evaluation was based on survey data collected 6 and 18 months after random assignment and state administrative records on unemployment benefits and quarterly earnings. The benefit-cost analysis involved placing a dollar value on all impacts of the program and comparing them with program costs.

Two follow-up surveys collected data on receipt of self-employment services, self-employment, business development, and employment in wage and salary jobs. Mathematica designed and pretested the instrument used for both surveys.

Findings from the interim report include:

• Project GATE could be replicated on a wider scale.
• Challenges of starting a business and obtaining financing should be made clear to program applicants.
• Credit repair and loan application assistance are important services to offer.
• Self-employment programs should be flexible enough to meet participants' diverse needs.

Mathematica was a subcontractor to IMPAQ International, LLC, along with Battelle Memorial Institute and the National Center on Education and the Economy.

Publications

“Growing America Through Entrepreneurship: Interim Report”  (August 2006)

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