Climate-Change Adaptation in Ethiopia: To What Extent Does Social Protection Influence Livelihood Diversification?

Social‐protection programmes like the Productive Safety‐Net Programme (PSNP) in Ethiopia can play a positive role in promoting livelihoods and enhancing risk management. This article uses propensity score matching to estimate its effect on income diversification. The results suggest that receiving transfers from the PSNP, on average, did not increase farm or non‐farm income but significantly increases natural‐resource extraction (one component of off‐farm income). While these results should be treated with caution, they suggest that the PSNP may not be helping smallholders diversify income sources in a positive manner for climate adaptation. The article concludes by arguing for the promotion of positive forms of income diversification and the further investigation of the PSNP's influence on autonomous adaptation strategies.