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Micro-Entrepreneurs and Financial Institutions (Research Paper Sample)


The essay has already been chosen from the journal.

Please select an article you find interesting from The American Economic Journal: Applied Economics. You should be sure it is MICROECONOMIC in nature, not macroeconomic. This is an incredibly rich journal, and the website includes links to the data sets that the authors use to conduct their analyses. For this assignment, you will write a very basic 5-7 page paper on a topic related to the article you have chosen.


Micro-Entrepreneurship Programs Can Increase The Performance Of The Labor Market.
It is not easy to manage performance. In several companies, one of the most daunting tasks for top executives is ensuring performance management. Even markets are not immune to issues of performance. Markets are judged based on how they perform. Like other areas where performance is an important indicator of success, markets are affected by several factors. These factors can contribute positively or negatively to the performance of the markets. The labor market is very sensitive. The market varies depending on economic conditions of each country. As economies expand and become large, the prospect of the market expanding and increasing more opportunities for skilled and unskilled labor increases. Therefore, the labor market is affected by entrepreneurship activities. Entrepreneurs play an important role especially in risk-taking and innovation that are important to adding value, creating more jobs and generating more income. There is a strong link between entrepreneurship and labor market. Therefore, in this essay, I argue that micro-entrepreneurship programs can increase the performance of the labor market.[Martínez, A., Puentes, E., & Ruiz-Tagle, J. (2018). The Effects of Micro-entrepreneurship Programs on Labor Market Performance: Experimental Evidence from Chile. American Economic Journal: Applied Economics, 10(2), 101-24.]
Literature Review
There is no standard definition of micro-entrepreneurship. However, micro-entrepreneurs are known to run micro-enterprises. The definition for micro-enterprises is different and depends on the administration of a country, their policy developments, and the stage of development that they are at. For developing countries, micro-entrepreneurs are many and they are responsible for improving the GDP and the quality of life for the residents of that country. They are mostly prevalent in these countries because they allow families to get a means of fending for themselves while providing goods and services for the people within these localities. Micro-entrepreneurs are normally known to operate on fixed capitals and a fixed number of workers but their importance to the labor market can never be understated.[Llanes, M., & Barbour, A. (2007). Self-employed and micro-entrepreneurs: Informal trading and the journey towards formalisation. Community Links.]
Micro-entrepreneurs and Financial Institutions
In several countries, micro-entrepreneurs never get funds from financial institutions for fear that it would be difficult to monitor how they spend these funds. Besides, on most occasions, there is a doubt that micro-entrepreneurs have the literacy level required to run a successful business. Most micro-entrepreneurs normally start small because they never have the collateral needed to help them secure large amounts so that they can start big. It is clear that micro-entrepreneurs play an important role in increasing employment opportunities and yet they are unable to get adequate financing. There is need to ensure that they can get the necessary funds to promote their activities.[Agier, I., & Szafarz, A. (2013). Subjectivity in credit allocation to micro-entrepreneurs: Evidence from Brazil. Small Business Economics, 41(1), 263-275.]
Micro-entrepreneurs and employment
Evidence suggests that micro-entrepreneurs do not show significant growth when considering the number of people they employ. While micro-entrepreneurs create and destroy so many jobs, it is evident that jobs created by micro-entrepreneurs are immune to recession effects. Th...

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