-------- Original Message --------
Subject: Graduating the Ultra-Poor in Ethiopia | Innovations for
Poverty Action
Date: Sun, 7 Jun 2015 11:12:51 -0500
From: Tsegai Emmanuel <emmanuelt40 at gmail dot com>
To: dehai news <dehai-news at dehai dot org>, tesfanews at gmail dot com
http://www.poverty-action.org/project/0005
Graduating the Ultra-Poor in Ethiopia
More than one fifth of the world's population lives on less than US$1.25
per day. While many credit and training programs have not been
successful at raising income levels for these ultra-poor households,
recent support for livelihoods programs has spurred interest in
evaluating whether comprehensive "big push" interventions may allow for
a sustainable transition to self-employment and a higher standard of
living. To test this theory, researchers evaluated a globally
implemented "Graduation" approach to measure its impact on the lives of
the ultra-poor. They found that the approach had long-lasting economic
and self-employment impacts and that the long-run benefits outweighed
their up-front costs. Here we summarize the Ethiopia site, which had
similar effects as the other successful sites.
*Policy Issue:*
More than one fifth of the world's population lives on less than US$1.25
per day. Many of these families depend on insecure and fragile
livelihoods, including casual farm and domestic labor. Their income is
frequently irregular or seasonal, putting laborers and their families at
risk of hunger. Self-employment is often the only viable alternative to
menial labor for the ultra-poor, yet many lack the necessary cash or
skills to start a business that could earn more than casual labor.
In the past, many programs that have provided ultra-poor households with
either credit or training to alleviate these constraints have not been
successful at raising household income levels on average. However, in
recent years, several international and local nongovernmental
organizations have renewed their support for programs that foster a
transition to more secure livelihoods. Combining complementary
approaches---the transfer of a productive asset, training, consumption
support, and coaching--- into one comprehensive program may help spur a
sustainable transition to self-employment. To better understand the
effect of these programs on the lives of the ultra-poor, researchers
coordinated to conduct six randomized evaluations in Ethiopia, Ghana
<
http://www.poverty-action.org/project/0494>, Honduras
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http://poverty-action.org/project/0053>, India
<
http://poverty-action.org/project/0012>, Pakistan
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http://www.poverty-action.org/project/0019>, and Peru
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http://www.poverty-action.org/project/0059>.
*Context of the Evaluation:*
In Ethiopia, researchers partnered with the Relief Society of Tigray
(REST) and the Dedebit Credit and Savings Institution (DECSI). The study
focused on participants in Ethiopia's food-for-work program who belonged
to households without any outstanding loans and with at least one member
capable of work. A local food security task force narrowed eligibility
further by choosing those they considered to be the poorest members of
their community. Within the sample, the median total per capita
consumption was 2014 PPP US$1.22 per day, with two-thirds of households
consuming less than US$1.25 per day. Two-thirds of households reported
that not everyone in the household got enough food.
*Details of the Intervention:*
In partnership with local implementing organization REST and
microfinance institution DECSI, researchers conducted a randomized
evaluation to test the impact of a two-year comprehensive livelihoods
program ("the Graduation approach") on the lives of the ultra-poor. This
approach was first developed by Bangladeshi NGO BRAC in 2002 and has
since been replicated in several countries. From a sample of 925
households, researchers randomly assigned half to the treatment group,
and half to the comparison group, which would not be eligible to receive
the program.
The intervention consisted of five complementary components, each
designed to address specific constraints facing ultra-poor households:
1. /Productive asset transfer/: One-time transfer of a productive asset
valued at 4,724 Birr (2014 PPP US$1,228). Most (62 percent) of
participants chose sheep and goats, while 24 percent selected oxen and
10 percent selected bees.
2. /Technical skills training/: Training on running a business and
managing their chosen livelihood. For example, households who selected
livestock were taught how to rear the livestock, including vaccinations,
feed and treatment of diseases.
3. /Consumption support/: Regular food support is a component of the
Graduation approach, but in this study it was not unique to the
treatment group. The entire sample received food support (valued at a
maximum 2014 PPP US$26 per month) through a separate food-for-work program.
4. /Savings/: Households had DECSI bank accounts opened and were
required to regularly deposit savings totaling 4,724 Birr (2014 PPP
US$1,228) over the two years of the program; households were unable to
withdraw funds until they reached this threshold.
5. /Home visits/: Weekly home visits by REST staff to provide
accountability, coaching, and encouragement.
The Graduation program began in 2010 and continued until May 2012.
Researchers conducted a first endline survey immediately after the
program ended, as well as a second endline survey around one year later.
*Results and Policy Lessons:*
Across all six countries, researchers found that the program caused
broad and lasting economic impacts. Treatment group households consumed
more, had more assets, and increased savings. The program also increased
basic entrepreneurial activities, which enabled the poor to work more
evenly across the year. While psychosocial well-being improved, these
noneconomic impacts sometimes faded over time. In five of the six
studies, long-run benefits outweighed their up-front costs. In Ethiopia,
specifically, researchers found similar effects:
/Economic impacts: /One year after the Graduation program ended, average
total monthly consumption among treatment households was 2014 PPP
US$47.50, an 18.2 percent increase over households in the comparison
group. Food and durable goods spending were also higher than in the
comparison group, and more households reported having enough food every
day. An asset analysis also revealed larger values for both productive
and household assets a year after the program ended. Treatment
households had 2014 PPP US$2,657 in total asset values, 68 percent more
than comparison group households. For treatment group households,
measures of financial inclusion also increased. Graduation program
households reported borrowing and saving at higher rates than comparison
group households, with a 372 percent increase in average total savings
to 2014 PPP US$345.
/Self-employment:/One year after the Graduation program ended, treatment
group households reported spending 43 minutes per day on productive
activities in addition to the average four hours among comparison group
households. Graduation households also experienced a two-fold increase
in livestock revenue relative to comparison group households.
/Psychosocial wellbeing:/Generally, the Graduation program did not
affect measures of physical or mental health. There were no changes in
illness, happiness, or stress, although treatment group households did
report a smaller likelihood of feeling anxious or worried in the last year.
/Political Involvement:/There is some evidence that participation in the
Graduation program increased political involvement. One year after the
program ended, 38 percent of treatment group households reported being a
member of a political party (compared to 33 percent for the comparison
group) and 57 percent attended a village meeting in the last year
(compared to 52 percent for the comparison group). Participation in the
Graduation program did not improve women's decision-making power.
/Cost-benefit analysis: /Researchers calculated total implementation and
program costs to be US$884 per household (2014 PPP US$4,157). However,
estimated benefits of consumption and assets growth amount to 2014 PPP
US$10,805 per household, representing an overall 260 percent return on
investment.
Received on Sun Jun 07 2015 - 21:43:33 EDT