Impacts of the Productive Safety Net Program in Ethiopia on Livestock and Tree Holdings of Rural Households

We evaluated the impacts of the Ethiopian Productive Safety Net Program (PSNP) on rural households’ holdings of livestock and forest assets including trees. Using panel data, we applied both regression analysis and propensity score matching. We found no indication that participation in PSNP induces households to disinvest in livestock or trees. In fact, households that participated in the program increased the number of trees planted, but there was no increase in their livestock holdings. We found no evidence that the PSNP protects livestock in times of shock. Shocks appear to lead households to disinvest in livestock, but not in trees. Our results suggest that there is increased forestry activity as a result of PSNP, and that improved credit access encourages households to increase their livestock holdings.