This study examines the impact of Ethiopia's large-scale social protection programme Productive Safety Net Programme (PSNP) on local and national economy-wide productivity. PSNP combines public works employment for cash or cereals and direct transfers and is targeted at the poor and vulnerable. It is anticipated,however, that the programme will likely have impacts on non-beneficiaries too. To estimate these impacts, the study uses local economy-wide impact evaluation (LEWIE) model to simulate PSNP and evaluate impacts. It also uses computerised general equilibrium (CGE) modelling to estimate nationwide spillovers.

Results suggest substantial local economy-wide impacts of PSNP. The programme's multiplier effect vary considerably across kebeles, and they include both positive and negative spillovers for non-recipient households. Nationwide impacts are sizeable. While PSNP areas see the largest income benefits (with 6% increase in household income), the rest of the country also experiences income benefits of up to 2 - 4%, as a result of the PSNP's impacts on supply and demand, wages and prices.