The Economic Impact of Productive Safety Net Program on Poverty: Evidence from Central Zone of Tigrai National Regional State, Ethiopia

The government of Ethiopia launched Productive Safety Net Program in 2005 realizing the magnitude and severity of poverty. This paper aims at evaluating the impact of productive safety net program on poverty in Central zone of Tigrai National Regional State, Ethiopia using primary data from randomly selected 600 rural households. Propensity Score Matching and Foster-Greer-Thorbecke (poverty measures) were used to evaluate impact of the program and poverty, respectively. This study indicated that the Program has positive and significant effect on consumption, livestock holdings, and productive assets. Moreover, the results indicated that the impact of the program on household total consumption expenditure per adult equivalent was found to be positive and significant. Statistically, this was found to be significant at 1 percent level of significance. Total poverty line and food poverty line were computed to be 330 and 235 Birr per month per adult equivalent, respectively. Using total poverty line, poverty rate was lowest among program participants (30.33%) than non-participants (31.1%). Highest poverty rate was found among respondents in households headed by women (38.42%) while households headed by men (23.1%). In conclusion, findings of this study revealed that the program has positive and statistically significant effect on poverty reduction through increasing household consumption expenditure per adult equivalent and protecting productive assets. Finally, it was recommended that female headed program participants based programs should be provided to help boost their agricultural output, and reduce endemic poverty.