Abstract
PurposeThis study investigates how enhancing slum dwellers' capabilities influences their entrepreneurship development and contributes to urban poverty reduction, providing insights for social policy design.Design/methodology/approachA quantitative research design is adopted applying structural equation modeling to survey data from 585 beneficiaries of social welfare schemes across Indian slums.FindingsEducational, economic and sociocultural capabilities positively impact quantitative and qualitative dimensions of slum entrepreneurship development, which reduces urban poverty, supporting the hypothesized relationships grounded in the Capability Approach.Research limitations/implicationsThe cross-sectional data limits causal inference. Wider sampling can improve generalizability. Capability antecedents of entrepreneurship merit further investigation across contexts.Practical implicationsIntegrated policy initiatives focused on education, skill building, access to finance and markets can leverage entrepreneurship for sustainable urban poverty alleviation.Social implicationsEnhancing slum dweller capabilities fosters entrepreneurship and empowerment, enabling people to shape their own destinies and reduce deprivations.Originality/valueThe research provides timely empirical validation of the Capability Approach and evidence-based insights to inform social policy aiming to alleviate urban poverty via entrepreneurship in developing countries.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-07-2023-0514.