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University of Oslo (2015)

The Effect of Ethiopia’s Productive Safety Net Program on Livestock Holdings of Rural Households

Zewdu, Tesfaye Abate

Titre : The Effect of Ethiopia’s Productive Safety Net Program on Livestock Holdings of Rural Households

Auteur : Zewdu, Tesfaye Abate

Université de soutenance : University of Oslo

Grade : Master of Philosophy in Economics 2015

Food insecurity and vulnerability to poverty is a chronic issue in Ethiopia as the majority of the country’s population depends on agriculture for their livelihood. The recurring lack and a high variability of rainfall causes persistent shocks of droughts which forces households to disinvest in assets and leave poor farming families without food crops which can be in turn a cause for the famine of millions of people in the country. To address the severe challenges of food insecurity and poverty, and abolishing recurrent famines in the country, emergency food aid has been taken as a solution for a long period of time. Programs, such as Food for Work and Employment Generation Scheme, were also used as social protection programs in the country since 1980’s. However, since the severe drought of 2002/03 brought extreme hunger in the country, the government of Ethiopia, in collaboration with a consortium of donors, has decided to supplement the existing response system with a more predictable and longer-term solution for reducing poverty and vulnerability to food insecurity. Hence, Food Security Program with a component called Productive Safety Net Program [PSNP] was launched in 2005 as a social protection program which makes people’s livelihoods more secure. After the inception of the PSNP, there are a number of studies done to evaluate its impact on different outcomes in Ethiopia. However, the novelty of this study can be explained by the facts that the study has used longitudinal national data set collected by Young Lives, which contains pre-intervention information and includes more waves after the start of the program, and little is done on the area of the research. Therefore, this study was done to evaluate the effect of the Public Works (PW) component of Ethiopia’s PSNP on livestock holdings of the rural households and investigate its impact disparities across the regions, sex of the household head and drought experience of households. This study uses Young Lives longitudinal household level data set of Ethiopia collected in three waves, 2002, 2006, and 2009. As far as analysis is concerned, both descriptive and econometric methods were used. Descriptive statistics (mean, percentage, range) was used to summarize the variables in the model. Econometric models, logit model, for the estimation of propensity scores, and matching with difference-in-difference were employed to estimate the effect of the program on livestock holdings and livestock accumulation measured in Tropical Livestock Unit. In this study, before rushing to interpret the model outputs, effort was made to test the balancing condition of observed covariates between the participant and non-participant groups. The ability of the matching approach to balance the relevant covariates of these two groups was checked by using the standardized bias approach. To avoid very poor matches the common support condition was imposed using the “minima and maxima” comparison approach. The balancing test for various matching methods was conducted for both the full sample and subsamples (by drought, regions, and sex of the household head). The PSM estimate result shows that participation in the PW component of the PSNP enhanced livestock accumulation ; but was not statistically significant. However, the result from the matching with DID estimator reflects that participation in the program had a significant effect on the change in livestock accumulation in TLU. Specifically, the change in livestock holdings of participant households equals 0.57 TLU between 2002 and 2009. The disaggregation results confirmed that the PW payment had a significant effect on the change in livestock accumulation for both subsamples of participant households that were affected by drought and that were not affected by the shock. There was also impact disparity across regions. Results from the matching with DID reflect that the program had a positive effect for all regions but this is statistically significant only for Tigray region. In addition, the there was a substantial impact disparity between female-headed and male-headed participant households. The result from both PSM and matching with DID estimator portrayed that the effect of the program on livestock accumulation was found to be statistically significant for male-headed participant households only. That is, participating male-headed households have benefited from the program in terms of livestock holdings as compared to female-headed participant households. Generally, findings of this study confirmed that participating in the PW component of the PSNP enhances livestock accumulation with considerable effect disparities across regions, sex of the household head, and drought experience of households.


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