Public Works in Ethiopia. Crowding out on-farm labor?
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This paper analyzes the impact of Public Works (PW) from the Productive Safety
Net Program (PSNP) in the agricultural regions of Ethiopia. In particular, based on a
household model with two inputs, I explore the effects of the program on capital and
labor decisions using the Ethiopian Rural Household Surveys (ERHS) from 2004 and
2009. Results indicate that PW did not have an effect crowding out adult labor on-
farm but it reduced child labor. Furthermore, after analyzing the relationship between
capital and labor inputs, there is not evidence suggesting that the program had an effect
on the demand of capital inputs (i.e., units of livestock and value of farming tools).