it seeks to contribute to the understanding of the process of skills formation, how skills link with household enterprise development, and the implications in targeting skills programs in low‐income and fragile contexts. Third, it seeks to contribute to the understanding of the ways such interventions help build resilience to shocks.

Overall, the evaluation findings add to the recent evidence that combining skills training and cash injections, even small ones, can be effective in stimulating employment and entrepreneurship. The program increased overall employment (up by 3.1 percentage points from 12.6 in the control group), profits in the worst profitability month (25 percent), and the likelihood of first‐time entrepreneurship (up by 4.1 percentage points from 15.8 in the control group). There are limited significant differences in impacts by gender, in line with most studies of this type (McKenzie 2017). The program also built household resilience to a large aggregate shock (Ebola), thereby boosting consumption by more than 50 percent and promoting investments in better housing conditions and in assets.

Based on the evaluation results, shaping noncognitive skills shows promise for youth in fragile states, but there is important heterogeneity of effects. Skills enhancements among higher‐ability individuals were associated with positive labor market impacts, while lower‐ability, poorer individuals experienced larger gains in skills formation, but consumed more rather than making productive investments. A similar expansion in cognitive ability was found across groups, all of which benefited from basic literacy and numeracy training, indicating that providing foundational skills may act as a second‐chance parenting opportunity. This, combined with the heterogeneity of effects on skills, is indicative that, in economies with a generalized low level of skill formation, the sensitive period for investments in cognitive skill development may extend into early adulthood. The results emphasize the notion that skills interventions are not substitutes for adequate safety nets and points to important, dynamic policy trade‐offs related to productivity gains and poverty reduction. The findings also confirm the literature on the age‐malleability of noncognitive abilities and the synergies across various skill components.

# 2 The Evaluation Context and the Intervention

Youth employability and income‐generating potential are key to household well‐being in Sierra Leone, but a substantial share of the country’s youth, especially in urban areas, are not employed. More than two Sierra Leoneans in five (41.3 percent) are youth, defined in Sierra Leone as people ages 15–35 years. According to the country’s most recent labor force survey, more than half of youth are in the labor force (55.7 percent), but 26.9 percent are not in education, employment, or training.<sup>4</sup> This problem is more acute in urban areas, where the latter share is 32.3 percent, while the youth employment rate is 37.7 percent (compared with 58.8 percent in rural areas). Urban youth with some secondary education exhibit one of the lowest employment rates in the country (27.2 percent). Among urban youth with some secondary education who are employed, more than half are self‐employed (54.8 percent).

Skills are often mentioned as one of the key constraints on youth in accessing labor market opportunities and reaching their productive potential in Sierra Leone. Almost half of youth cannot read or write (46.5 percent), and the illiteracy rate is higher among young women than among young men (57.4 percent versus 32.9 percent). There is a large jump in earnings among people with some primary education relative to those with no schooling, and the jump at the highest levels of education is similar (Margolis et al. 2016).

> 4 Unless otherwise noted, the national labor data presented in this section are taken from Margolis et al. (2016).

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