Does productive safety net program enhance livelihoods? Insights from vulnerable households in Wolaita zone, Ethiopia

Background The impact of Productive Safety Net Programs (PSNPs) on food security, poverty, and livelihoods has been examined in several studies. While some studies found positive impacts on food security and agricultural productivity, there are still gaps in understanding the long-term effects of these programs on poverty reduction and food security. This study aims to investigate the impact of PSNP on the livelihood of beneficiaries based on indicators including access to basic services, income, expenditure on food, adaptive capacity, and dietary diversity. Methodology This article used quasi-experimental design and treatment effects model taking into account access to basic services, income, food expenditure, assets, adaptive capacity, and household dietary diversity as outcome variables of interest. 300 respondents were randomly selected from the population of safety net beneficiaries and non-beneficiaries in the study area. Out of the 300 respondents, 150 were selected as the treatment group, who were beneficiaries of the safety net program. The algorithms used in analysis include regression adjustment, inverse probability weighing and propensity score matching. Results The study’s results reveal that the PSNP has no statistically significant impact on access to basic services and income based on all three algorithms, yet it does show a significant and negative effect on food expenditure and assets. The coefficients across all three models consistently demonstrate this negative impact, underscoring its statistical significance at the conventional significance level (p = 0.05). This suggests that the PSNP leads to a reduction in food expenditure. Furthermore, the analysis highlights substantial differences between PSNP members and non-members across all three variables, with non-members having higher mean values for assets. This difference is statistically significant at the 1% level, suggesting that membership in the PSNP has a tangible impact on asset ownership. The study’s mixed findings emphasize the complexities of designing effective social protection programs that can adequately address the multifaceted nature of poverty.