8 Public Social Safety Nets

The previous chapters discussed how poor people can try to protect themselves against poverty and vulnerability by building up their asset base or calling on friends and relatives. Other strategies include relying on public mechanisms, such as social assistance or social insurance (unemployment, health, and disability insurance; pensions). Social insur-ance is usually available only through formal labor markets. As a result, it is out of reach for most poor families—only about 30 percent of the em-ployed urban poor work in the formal sector in Latin America—making social assistance the key public instrument for helping the poor. Social assistance aims to help the poor cope with poverty and vulner-ability when private mechanisms and social insurance cannot—this is why it is commonly referred to as a social safety net.1 Its design therefore needs to be informed by the availability of social insurance and private schemes. It also needs to respond to what is known about the nature of the deprivation and vulnerability affecting the target population. This chapter reviews what is “urban ” about poor people living in cities, focusing on differences that are relevant to social safety nets. It then discusses whether these differences imply a need for different types of programs or just different design of specific interventions. Myths and Facts about the Safety Net Needs of the Urban Poor Before discussing the safety net needs of the urban poor, it is worth tackling two myths about the topic. Both are based on the common misconceptio