Policy highlights:

• A large-scale pilot on cash transfers to extremely poor and labour-constrained households in Ethiopia shows diverse effects on the beneficiaries’ livelihood strategies.
• Positive effects include increased food security and food consumption because of the farmers keep the staple crops for consumption instead of selling them, a reduction in the number of hours worked in the household by children, and increases in social capital and subjective beliefs of quality of life.
• Effects on productive assets and agricultural production varied for different crops, but the overall value of production increased by 17 to 18 percentage points on average.
• Overall, the cash transfer programme affected households and household members in a positive but differentiated manner. This result supports the use of cash transfers for alleviating poverty, but also indicates a need to carefully analyse how different groups are affected by cash transfers.