Safety Nets

Despite national social protection programs becoming more widespread in low- and middle-income countries in recent years, critical gaps in coverage and financing persist. Three out of four people living in extreme poverty in low-income countries (LICs) lack basic social safety nets. Coverage of other forms of social protection is even lower.

COVID-19 saw the largest scale up of social safety net transfers in history.  And in 2023, in response to the global food crisis, social protection responses more than doubled.

An estimated 36 percent of the poorest people escaped extreme poverty because of social safety nets, providing clear evidence that social safety net programs have a substantial impact in the global fight against poverty. The evidence base continues to mount on the value of layered social safety nets in diverse settings such as  India, Afghanistan, Nicaragua, and the Sahel.

Data 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 globally, based on today’s available data, two out of five of the world’s poorest people lack safety net coverage. When considering only low-income countries, that figure rises to three out of four.

These safety net transfers not only enable nations to invest in human capital but also provide a crucial source of income for the poor, enhancing their living standards and helping them withstand economic shocks.

As of 2018, some were covered by safety net programs, including some 650 million people in the poorest quintile globally.

Social safety nets can be defined as policies and programs that help individuals and families manage risk and volatility, protect them from poverty and inequality, and help them to access economic opportunity. Social safety net – or social assistance - programs are based on a core set of instruments including cash, in-kind and productive inclusion interventions. Such programs are built on country level delivery systems (for identification, payments, and social registries) to ensure that safety net transfers reach the right beneficiaries at the right time.

The scale up of social safety net programs is part of the World Bank’s broader strategy on social protection, which aspires to achieve universal social protection coverage by 2030.  In this context, social safety net programs focus on three core goals.

• Equity: This is essential for ensuring that poor and vulnerable people are given the support they need to reach a basic minimum level of consumption and well-being and, thus, for fostering equality of opportunity.

• Resilience: This helps to prevent people from falling into or falling deeper into poverty. It is especially true when a shock can cause negative coping responses such as reducing food consumption, selling productive assets, or withdrawing children from school for their labor as these actions can have permanent or long-lasting negative consequences.

• Opportunity: This is to build human capital and help men and women access productive income-earning opportunities. Social Safety net programs increasingly provide a foundation to link to productive inclusion and job opportunities, especially for adolescent girls and women.

Long-term solutions to building resilient economies require the creation of quality jobs. The region's labor market faces the challenge of transforming itself in the face of the development of new technologies, in addition to other challenges such as low productivity, deficiencies in education, and gaps in workers' skills.

The World Bank works to strengthen the creation of quality jobs, especially for the most hard-to-reach groups, such as women and youth. According to recent data, the labor force participation rate for women in the region is 68%, compared to 93% for men.

For youth, one of the main challenges to accessing better jobs is linked to gaps in education and skills. According to the latest results of the Programme for International Student Assessment (PISA), implemented by the OECD – three out of four 15-year-olds do not reach basic level in mathematics and one out of two is below the expected average in reading. On average, 15-year-old students in the region are five years behind an average student in OECD countries. Recovery is complex but possible and should be addressed immediately.

Connectivity is critical to laying the foundation for a prosperous and resilient future. Currently, a lack of digital infrastructure means that around 17 million workers cannot access the benefits of the latest technologies to improve their job prospects and raise wages.

There is also an urgent need to improve countries' resilience to climate events that have already inflicted substantial economic and social losses.

• Case Compass for case management supporting governments
• UNICEF
• World Food Programme
• Global Alliance Against Hunger and Poverty