Skills and Youth Entrepreneurship in Africa: Analysis with Evidence from Swaziland

The shortage of entrepreneurial skills has lowered search effectiveness of potential young entrepreneurs and the rate of youth start-ups. This paper contributes to closing a gap in the literature on entrepreneurship and development by developing a model of costly firm creation with skill differences between young and adult entrepreneurs. The model shows that for young entrepreneurs facing high costs of search for business opportunities, support for training is more effective in stimulating productive start-ups than subsidies. The case for interventions targeted at youth rises in societies with high costs of youth unemployment. We test the role of skills and training for youth entrepreneurship on data from a recent survey of entrepreneurs in Swaziland.