Climate change adaptation in Ethiopia: to what extent does social protection influence livelihood diversification?

Ethiopia is vulnerable to climate change due to its limited development and dependence on agriculture. Social protection schemes like the Productive Safety Net Programme (PSNP) can play a positive role in promoting livelihoods and enhancing households’ risk management. This article examines the impact of the PSNP by using Propensity Score Matching to estimate the effect on income diversification. The results show receiving transfers from the PSNP, on average, increases natural resource extraction (one component of off-farm income). While these results should be treated with caution, they suggest the PSNP may not be helping smallholders diversify income sources in a positive manner for climate adaptation. The article concludes by arguing for further investigation of the PSNP’s influence on smallholders’ adaptation strategies.