DISCUSSION PAPER NO. 1504 Abstract Most safety net programs in low and middle-income countries are conceived for rural areas. Yet Entering the City as the global urban population rapidly increases and poverty urbanizes, it becomes of utmost Public Disclosure Authorized Emerging Evidence and Practices with importance to understand how to make safety nets work in urban settings. This paper discusses Safety Nets in Urban Areas the process of urbanization, the peculiar features of urban poverty, and emerging experiences with urban safety net programs in dozens of countries. It does so by reviewing multidisciplinary literature, examining household survey data, and presenting a compilation of case studies from Ugo Gentilini a ‘first generation’ of programs. It finds that urban areas pose fundamentally different sets of opportunities and challenges for social protection, and that safety net programs are at the very beginning of a process of urban adaptation. The mixed-performance and preliminary nature of the experiences suggest to put a premium on experimentation, learning and evidence- generation, particularly in key design choices as well as in better connecting safety nets to spatial, economic and social services agendas in urban areas. Public Disclosure Authorized Public Disclosure Authorized About this series... Social Protection & Labor Discussion Papers are published to communicate the results of The World Bank’s work to the development community with the least possible delay. This paper therefore has not been prepared in accordance with the procedures appropriate for formally edited texts. The findings, interpretations, and conclusions expressed herein are those of the author(s), and do not necessarily reflect the views of the International Bank for Reconstruction and Development/The World Bank and its affiliated organizations, or those of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgement on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Public Disclosure Authorized For more information, please contact the Social Protection Advisory Service, The World Bank, 1818 H Street, N.W., Room G7-803, Washington, DC 20433 USA. Telephone: (202) 458-5267, Fax: (202) 614-0471, E-mail: July 2015 [email protected] or visit us on-line at www.worldbank.org/spl. © 2015 International Bank for Reconstruction and Development / The World Bank Entering the City: Emerging Evidence and Practices with Safety Nets in Urban Areas July 2015 Ugo Gentilini Senior Economist Social Protection and Labor Global Practice [email protected] 1 Abstract. Most safety net programs in low and middle-income countries have hitherto been conceived for rural areas. Yet as the global urban population increases and poverty urbanizes, it becomes of utmost importance to understand how to make safety nets work in urban settings. This paper discusses the process of urbanization, the peculiar features of urban poverty, and emerging experiences with urban safety net programs in dozens of countries. It does so by reviewing multidisciplinary literature, examining household survey data, and presenting a compilation of case studies from a ‘first generation’ of programs. The paper finds that urban areas pose fundamentally different sets of opportunities and challenges for social protection, and that safety net programs are at the very beginning of a process of urban adaptation. The mixed-performance and preliminary nature of the experiences suggest to put a premium on learning and evidence-generation. This might include revisiting some key design choices and better connecting safety nets to spatial, economic and social services agendas compelling to urban areas. JEL Classification: O1, O2, O18, I38 Keywords: urban areas, urban poverty, social protection systems, safety nets, social assistance, cash transfers, slums, migration, mobility, social inclusion, urban development, jobs, structural transformation, urbanization, cities. 2 Table of Contents Acknowledgements ............................................................................................................................. 7 Executive summary ............................................................................................................................ 8 Overview ........................................................................................................................................... 11 Section I. Understanding urbanization .......................................................................................... 15 1.1 Urban dynamics beyond the tipping point ................................................................................... 15 1.2 The economics of structural transformation ................................................................................. 18 1.3 Urbanization, with and without development .............................................................................. 21 1.4 Quality of urbanization ................................................................................................................. 24 Section II. The challenge of urban poverty .................................................................................... 26 2.1 The urbanization of poverty ......................................................................................................... 26 2.2 Poor areas or poor people? ........................................................................................................... 28 2.3 Is urban poverty different? ........................................................................................................... 32 2.4 Social assistance in urban areas: preliminary estimates from survey data ................................... 40 Section III. Key issues in design and implementation of urban safety nets ................................ 45 3.1 Identifying the poor ...................................................................................................................... 46 Assessments ................................................................................................................................ 46 Targeting ..................................................................................................................................... 51 3.2 Outreach and enrollment .............................................................................................................. 60 3.3 Mobility and portability ............................................................................................................... 65 Mobile populations ..................................................................................................................... 65 Residency .................................................................................................................................... 70 Managing labor incentives .......................................................................................................... 75 3.4 Governance arrangements ............................................................................................................ 78 Quasi-formal and community-based organizations .................................................................... 86 Social intermediation services .................................................................................................... 87 3.5 Complementary interventions ...................................................................................................... 88 Section IV. Lessons from country case studies .............................................................................. 99 4.1 The Urban Dibao Program in China .......................................................................................... 102 4.2 Urban Prospera Program in Mexico ........................................................................................... 109 4.3 Familias en Acción in Urban Colombia ..................................................................................... 116 4.4 Safety Net Programs in Nairobi’s Slums ................................................................................... 123 4.5 The Programa de Apoyo Temporal al Ingreso (PATI) in urban El Salvador............................. 130 4.6 Family Rewards: A U.S. Experimental Conditional Cash Transfer Program ............................ 137 4.7 Urban Voucher Program in Gaza ............................................................................................... 143 4.8 Social Pensions in Urban Delhi .................................................................................................. 150 4.9 Philippines: Modifying a Conditional Cash Transfer for Urban Areas...................................... 157 4.10 Program Keluarga Harapan in urban Indonesia ....................................................................... 165 3 References ....................................................................................................................................... 172 Figures Figure 1. Population trends and projections, 1950-2050 ................................................................... 15 Figure 2. Sources of urban population growth in India, 1963-2011 (million people)