Impacts of livelihood empowerment programs on refugee wellbeing and economic inclusion: Evidence from Dollo Ado refugee camps in Ethiopia

Abstract

The ongoing insecurity and environmental shocks in Somalia have led to a substantial refugee influx into Ethiopia since 2006, particularly affecting Dollo Ado sub-region, where five camps now shelter 215,000 refugees and asylum seekers as of March 2024. Addressing the protracted needs of these camps, UNHCR, in collaboration with the IKEA Foundation, has implemented livelihood empowerment projects aimed at economic inclusion. This paper evaluates the impact of the third phase of the IKEA Foundation’s Livelihoods and Energy and Environment Projects (2019–2021), focusing on cooperative and business groups involved in agriculture, livestock, firewood, and solar energy. Despite the lack of a control group, our econometric approach allows us to explore significant temporal changes attributed to the intervention. Our findings demonstrate significant improvements in mental health, life satisfaction, financial inclusion, and social integration among participants. While the interventions successfully enhanced income and savings opportunities, particularly for women, they did not significantly improve food security, indicating external influences such as regional instability, humanitarian shortfalls, and climate issues. This study underscores the necessity of multi-stakeholder collaboration to improve refugee welfare in protracted crises and highlights the importance of livelihood empowerment investments to optimize wellbeing and economic inclusion outcomes.