Mechanisms Linking Entrepreneurship Access to Household Welfare in Kenya: Multilevel Causal Mediation Analysis

Entrepreneurship promotion is a central pillar of Kenya's development strategy, yet the causal pathways through which access to entrepreneurial opportunities improves household welfare remain poorly specified. Moving beyond the conventional focus on average treatment effects, the analysis distinguishes between household-level mediators, such as business income and asset accumulation, and community-level mediators, including local market density and social capital formation. The article argues that the welfare effects of entrepreneurship access are contingent on a sequential mediation structure in which household-level resource mobilisation must precede community-level spillover effects. A formal multilevel mediation model is specified, and the identification assumptions required for causal inference are examined critically, with particular attention to the role of programme placement and spillover contamination in the Kenyan context. The framework proposes that entrepreneurship access operates through distinct pathways whose relative importance varies with the institutional environment and the type of welfare outcome considered. The analysis concludes that policy evaluations which ignore mediation structure risk misattributing welfare gains and overlooking the conditions under which entrepreneurship access translates into sustainable improvements in household wellbeing.