A growing number of developing countries are investing in social safety nets -- to improve the lives and livelihoods of billions of poor and vulnerable people. Social safety net programs include cash and in-kind transfers targeted to poor and vulnerable households, with the goal of protecting families from the impact of economic shocks, natural disasters, and other crises.
Yet around 55 percent of the world’s poor or 773 million people with acute needs still lack safety net coverage —especially in lower-income countries and in urban areas.
Globally, low-income countries face the greatest coverage gap in reaching the poorest people:
- In low-income and lower-middle-income countries, social safety nets cover only 25 percent of the extreme poor, compared to 64 percent in upper-middle-income countries.
- In Sub-Saharan Africa and South Asia, where most of the global poor live, social safety nets cover just one-tenth and one-fifth of the poorest 20 percent of the population, respectively.
- Coverage of the poorest in urban areas, where an estimated 863 million people live in precarious settlements, also remains a challenge.
Based on the World Bank Aspire database, 69 million people are lifted from absolute poverty – defined as those living on less than $1.25 a day – through safety net programs. At the same time, 97 million people are uplifted from relative poverty – defined as people in the bottom twenty percent of the income or consumption distribution – proving that safety nets serve as an important tool in addressing poverty.
Evidence now shows how safety nets cash transfers not only help nations invest in human capital, but also serve as a source of income for the poor, improving their standard of living. Today, more than 1.9 billion people in some 130 low and middle-income countries benefit from social safety net programs.
Last Updated: Oct 13, 2017