Can simpler, cheaper poverty graduation programs still deliver? Evidence from Ethiopia
A randomized evaluation of a lower-cost poverty graduation-style program in rural Ethiopia finds modest gains in savings and livestock income but no sustained improvements in consumption or food security, suggesting that smaller cash transfers and lighter support may be insufficient to help extremely poor households escape poverty, particularly in shock-prone settings
- social protection
- poverty alleviation
- Ethiopia
By Jessica Leight, Daniel Gilligan, Melissa Hidrobo, Harold Alderman, and Michael MulfordMay 8, 2026
Key takeaways
•A light-touch graduation model was assessed in a randomized trial.
•There were some positive effects on financial inclusion, assets, and income from livestock, but no effects on consumption.
•This light-touch model did not generally stimulate an exit from a poverty trap for the targeted households.
Republished with permission from VoxDev.
A randomized evaluation of a lower-cost poverty graduation-style program in rural Ethiopia finds modest gains in savings and livestock income but no sustained improvements in consumption or food security, suggesting that smaller cash transfers and lighter support may be insufficient to help extremely poor households escape poverty, particularly in shock-prone settings.
A long-running debate in development economics centers around poverty traps: the hypothesis that poor households, by virtue of limited asset stocks, low skills, or both, cannot access high-return economic opportunities that would shift their economic trajectory. However, empirically identifying poverty traps is extremely challenging, and the most compelling evidence to date is drawn from Bangladesh, where researchers found that the “tipping point” for escaping poverty was roughly $500 (Bandiera et al. 2017). Households whose asset stock exceeded that level were able to escape poverty, while households characterized by asset stocks below this level generally failed to do so.
The intervention that was effective in that trial was what became known as a “graduation model” intervention, an intervention that combines large asset transfers with training, coaching, and other support. These models have shown promise in multiple contexts (Banerjee et al. 2015), but are expensive and hard to scale. Our research seeks to explore whether a lighter-touch, cheaper version can be equally effective in reducing poverty.