An estimated 36 percent of the very poor escaped extreme poverty because of social safety nets, providing clear evidence that social safety net programs—which include cash, in-kind transfers, social pensions, public works, and school feeding programs targeted to poor and vulnerable households—are making a substantial impact in the global fight against poverty. Data also shows that these programs lower inequality, and reduce the poverty gap by about 45 percent. These positive effects of safety net transfers hold true for low and middle-income countries alike.
Yet in low-income countries around one in five of the world’s poor still lack safety net coverage.
Safety nets benefits as a share of the poor’s income and consumption are lowest in low-income countries, at only 13 percent. Sub-Saharan African countries spend an average of US$16 per citizen annually on safety net programs, whereas countries in the Latin America and the Caribbean region spend an average of US$158 per citizen annually. Globally, developing and transition countries spend an average of 1.5 percent of GDP on safety net programs.
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, some 2.5 billion people are covered by safety net programs and some 650 million people or 56 percent of the poorest quintile.
Last Updated: Mar 28, 2019