Breaking Barriers

The Impact of Three Years of Unconditional Cash on Women's Entrepreneurship

We are going to introduce you to four mothers – Yasmin, Carmen, Susan and Regina – living across separate states, with different circumstances, but similar ambitions. Together, their journeys tell an important story about women’s entrepreneurship and the effects of receiving unconditional cash over the course of three years on their lives.

Three years ago, Yasmin was working from home as a customer service representative. She is a single mother of three children. At the time, she and her children were all living with Yasmin’s mother in a crowded one bath, one bedroom apartment. But, outside that, Yasmin didn’t have much support. Like fifty percent of parents in the United States who struggle with securing and affording childcare, much of her income was going towards childcare.¹

Yasmin was barely making ends meet.

Then, at what she calls “[just] the right moment,” she learned about receiving the unconditional cash transfers. Now, every month, for the next three years, Yasmin would be receiving $1,000 monthly payments to be used at her discretion.

Suddenly, Yasmin had some breathing room with which she purchased living essentials including food and clothing for her children. She was also able to update her phone and start saving for a down payment on a car.

A year-and-a-half into the program, Yasmin decided that she “wanted something better” than her current circumstances. For the next few months, her cash transfer payments were put towards online classes. Having just earned her bachelor’s degree in business administration, she also taught herself to become a credit repair specialist and a tax preparer. Once she got her certificate, Yasmin got busy building a business, advertising her services at local shops and generating buzz in her neighborhood.

Today, Yasmin has her own full time financial services business. She is no longer a customer service representative, in fact, all of her income comes from the new skillset she was able to acquire with the help of the cash transfer payments. And now, she works out of her home while her children are at school and is able to take more control over her life and schedule.

Yasmin’s story is not unique.

Our data show that female identifying recipients of the $1,000 were more likely to engage in small-scale or “microventures” than their male counterparts.

In the third year of the program, female recipients were 5 percentage points more likely to report ever starting or helping to start a business–a 15% increase from the average female control participant. These businesses range from hair braiding, selling t-shirts, photography – specifically enterprises that women could run from their homes.

Childcare in the United States is expensive – and those responsibilities often fall on mothers. So, for mothers with caretaking responsibilities, and other barriers to finding and keeping employment (such as learning disabilities and chronic illnesses) starting a business became an invaluable opportunity for increased flexibility. Recipients could nurture what they had long considered a hobby, or refine a skill that could enhance their income and uplift not only their own lives, but also those of their families for the future.

Like many women who received the cash transfers, now Yasmin isn’t just able to better support herself and her own family, she is also providing a needed service to other people in her community.

Those are the foundations of what creates a robust local economy.

We are well aware that ambition knows no gender bounds. Quantitatively, we find female recipients are 8% more likely to report having an idea for a business compared to their control participant counterparts. Women are just as driven to be their own bosses, with data showing they are even more likely than men to be solopreneurs.² Yet, despite this shared motivation, men often have the upper hand. They kick start their businesses earlier in life and secure more venture capital along the way.³

But it is not just about funding. Women face a unique challenge when it comes to time itself, especially when they shoulder the lion's share of caregiving duties at home. This imbalance often delays or sidelines their entrepreneurial dreams.

Take Carmen, for example, a devoted stay-at-home mother of two. She toyed with the idea of pursuing a career beyond the home, but the exorbitant cost of childcare made it a financial impossibility.

So, Carmen decided to carve her own path, launching a home-based business making custom t-shirts for events and birthdays. Despite her determination and a bit of seed money, there was one resource she couldn't buy: time. With her primary focus on caring for her children, particularly one with special needs, she struggled to dedicate the necessary hours to grow her business beyond small-batch orders.

Even with a financial boost, Carmen, and many women like her, still grapple with the unequal burden of unpaid labor at home, a challenge that remains unchanged despite their entrepreneurial aspirations. Despite the constraints faced by mothers like Carmen, our data reveals a paradoxical trend: it was often women burdened with multiple responsibilities at home who seized the opportunity to launch their own businesses. Entrepreneurship offered them valuable flexibility.

Mothers struggling to make ends meet in low-paying jobs with minimal benefits saw entrepreneurship as a viable solution. For them, starting their own businesses offered a win-win scenario: the chance to generate income from home while crafting a flexible schedule that could align with their caretaking duties. Yasmin, the single mother who created her own financial services business, found this first hand:

This flexibility became even more important during the COVID-19 pandemic. In 2020, Susan was a single mother of two. Her partner at the time was incarcerated. Susan had recently started a photography business, but as lockdowns spread across the country, she struggled to book clients.

At one point, she considered giving up her photography business and picking up a part-time job.

Then came unexpected help from unconditional monthly cash transfers. With the few events she managed to schedule and the cash transfers, she was able to make ends meet. By 2022, her clientele was growing. She had a stable income and flexible hours to take care of children. But beyond that, Susan discovered something priceless – she was happy. Like Americans everywhere she said, “I wanted to do something that I was passionate about.” Aside from providing a stable income and flexible hours, starting a photography business gave Susan an opportunity to do work she loved.

In addition to barriers due to childcare and household responsibilities, the women in our sample faced compounding challenges that impacted their participation in the workforce.

After several interviews with Susan, she disclosed that she had struggled to get consistent work due to her prior incarceration. In fact, part of Susan’s drive to start her independent photography business was to circumvent this employment obstacle. For some participants like Susan, setting up a small business was also a way to work around these issues.

Regina, a single mother of two, personally knew what this was like. After being let go from multiple jobs because of her criminal record, she decided to start her own business in aromatherapy and padded her revenue by driving neighbors to work. But, her small businesses weren’t enough; the cash transfers made up most of her income.

Together, it made a dent.

“It was terrible,” Regina said, “but at the same time, it kept me afloat.” She could now pay her basic necessities, which had a ripple effect.

With the help of the cash transfers and a bit of ingenuity, these women were able to build a more stable life for their families.

The decision for our female participants to start a small business hinged on a complex interplay of personal and circumstantial factors.

For those with partners, the financial risk associated with starting an independent venture was often mitigated by their significant other's income. But, for single mothers the choice to start a small business was transformative and required meticulous planning.

In many cases, mothers who successfully sustained themselves through their small businesses had pre-existing skills they could monetize, though this wasn't always the case. Many participants needed an intermediary step. They used the cash transfers to pay for certificates and licensing programs that gave them both the skills, credentials and the confidence they needed to run a small business. Others relied on the cash transfers to supplement their income as they strategized and refined the details of their ventures.

Our research underscores the pivotal role of the cash transfers as a vital mechanism for female entrepreneurs, like Yasmin, Carmen, Susan and Regina. In year three, 36% of female recipients say they have started or helped start a business compared to 31% of female control participants.

The cash transfers frequently served as a gateway to additional income streams precisely when women needed them most. Perhaps most importantly, it emerged as a crucial tool in situations where viable alternatives seemed scarce.

Disclaimer: These stories and participant experiences are not meant to be representative of all qualitative participants. Instead, they are in-depth snapshots of the lived reality of cash transfer recipients across different areas of their lives and at distinct periods during the program.

Methodological Statement: The data for this piece comes from five rounds of in-depth, semi-structured qualitative interviews with 156 participants. Interview summaries, field notes, thematic memos and extensive case memos reflecting data from all five rounds were coded using an iterative and open coding method. The initial findings reflected in these pieces were identified during this first round of open coding.