Job vs Free Money? Just give the poor the goddamn fish!

Give a man a fish and he'll eat for a day. Teach a man to fish and he'll eat for a lifetime? 

-American proverb

Is it better for the poor to earn money at a job or should we just give them money?  

In Ethiopia, new jobs aren't going to be doctors and lawyers. New jobs come in the form of sweatshops. But even if it's a tough job, learning the skills of being a good employee and the value of hard work is a crucial part of the ladder out of poverty. Right? A business seminar and free money is no substitute for the dignity of work . Right?

Wrong.  

Then they took a large number of people who applied to jobs at these firms and sorted them into three groups. One group got entry-level jobs. A second got a cash grant from the researchers, as well as a five-day training course in entrepreneurship. The third was a control group, and so got nothing.

Over the course of the next 13 months, Blattman and Dercon tracked what happened to all three groups. This involved compiling data on their wages, conducting surveys on their health, and having research assistants conduct in-depth interviews with some of the workers.

The goal was to figure out if factory jobs helped more people than entrepreneurship support, and whether either was better than simply doing nothing and letting people find jobs on their own. Blattman came in expecting the factory work to look relatively attractive — but ended up being surprised.

It turned out that for most people, working in a factory didn’t significantly improve their income relative to the people in the control group. But getting cash to help start your own business did.