Productive Workfare? Evidence from Ethiopia's Productive Safety Net Program


Public works programs have long been a popular policy tool to reduce poverty and build productive infrastructure. While an extensive literature has documented the effect of these programs on poverty, there is virtually no evidence on the productive effect of the infrastructure. This paper attempts to start filling this gap in the context of the Productive Safety Net Program – a large-scale public works program implemented in Ethiopia since 2005. Under the program, millions of beneficiaries received social transfers conditional on their participation in activities such as land improvements and soil and water conservation measures. We examine the value of these activities using a satellite-based indicator of agricultural productivity and (reweighted) difference-in-differences estimates. Results show that the program is associated with limited changes in agricultural productivity. The upper bound of the main estimate is equivalent to a 2.2 percent increase in agricultural yield. This contrasts with existing narratives and calls for more research on the productive effects of public works.

American Journal of Agricultural Economics (forthcoming)