Evaluating the Efficiency of Microeconomic Empowerment Programs through Econometric Matching Approaches

Abstract

This study aims to evaluate the effectiveness of microeconomic empowerment
programs using an econometric matching approach, with a focus on increasing
participants' income and welfare. Microeconomic empowerment programs in
Indonesia have become the primary strategy for overcoming poverty and
enhancing the quality of life for the community, particularly in the micro
business sector. This study employed a qualitative research design,
incorporating interviews, questionnaires, and observations at two research
locations in Bogor Regency and Bantul Regency. The study's results indicate
that this program has a positive impact on participants with more established
businesses, resulting in an average income increase of approximately 30%.
However, participants who are just starting a business experience difficulties
in making optimal use of training and capital assistance. The evaluation of this
program also revealed that the training materials need to be adjusted to the
type of business run by the participants, as well as the need for post-program
support to ensure business sustainability. The use of econometric matching is
effective in reducing selectivity bias and providing more accurate estimates
of program impact. This research offers recommendations for program
adjustments that are more closely aligned with the needs of participants, as
well as the importance of post program mentoring in strengthening the long
term impact.