refer to as the non-ultra-poor (non-UP) sample. For simplicity, we use the abbreviation UP to refer to the ultra-poor for the remainder of the paper.

# **Poverty and Socioeconomic Conditions of UP and non-UP Households at Baseline**

Overall, the PRA was successful in identifying the poorest households: 80% of the households identified as UP are below the 2016 national poverty line of USD 112 PPP per person per month (USD 30 nominal), compared to 57% in the non-UP sample, and 55% at the national level for the same year (ALCS, 2016). As Panel A in Table 1 shows, 20% of UP households are women headed, compared to 5% in the non-UP sample and 0.3% in Afghanistan.<sup>6</sup> UP households are worse-off than non-UP households across all dimensions analyzed: Illiteracy is exceptionally high for both groups but much higher for UP primary women (96%) than nonUP (90%), while the national average is 80% for adult women. Illiteracy rates for primary men are also high at 84% and 73% for UP and non-UP households, respectively – much higher than the national average of 51% for adult men.<sup>7</sup> School enrollment is 53% for girls and 59% for boys aged 6-19 in UP households, compared to 54% and 64%, respectively, in non-UP households. Supply constraints may contribute to this: As Table 2 shows, around half of the villages have a primary school (56%) or a secondary school (48%).

UP households own significantly fewer assets than non-UP households and low levels of financial inclusion and high indebtedness are the norm: Having any savings in both groups is almost non-existent (2%), while UP households are more likely to be indebted (68%) than non-UP households (52%). Most of the debt for UP households is for consumption smoothing and health shocks (89%), rather than investment (4%), and comes from informal sources such as family and friends or grocery stores (88%). Supply-side constraints may partially explain the low coverage of formal institutions, with only 5% of villages reporting the presence of a microfinance institution, and none reporting the presence of a bank (Table 2).

UP households also report consistently lower levels of psychological well-being than non-UP households. UP primary women report lower life satisfaction than women in non-UP households (5.0 vs. 6.7 points in a 1-10 scale, where 1 indicates very unsatisfied and 10 indicates very satisfied). Using standard cutoffs for depression on the Center for Epidemiological Studies Depression (CES-D) scale, 69% of women in UP households and 52% of women in non-UP households report suffering major depression. For reference, UP women would rank last on life satisfaction in the list of 60 countries for which data are available in the 2016 World Values Survey. Non-UP women would rank 39th in the same list.<sup>8</sup> UP primary men also report high levels of depression, but much lower than women in the same

> 6 In this section, all figures for Afghanistan come from the ALCS 2016 and global indicators come from the World Bank Open Data Indicators, unless otherwise stated.

> 7 For reference, 17.3% of adult women and 10.2% of adult men worldwide are illiterate. Afghanistan and world figures are estimated for adults 15 years and over for 2016.

> 8 Comparison is done with the life satisfaction rating for all women in the sample of 60 countries.

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