Safety Nets

Social safety nets are transfer programs that seek to prevent those living at or near the poverty line from falling below a livable level of income. They act as an economic parachute for at-risk individuals and families.  Safety net programs can be provided by the public sector (federal and state government) or private sector (charitable organizations or individuals). Safety net transfers include:

• Cash transfers


• Food-based programs such as supplementary feeding programs and food stamps, vouchers, and coupons


• In-kind transfers such as school supplies and uniforms


• Conditional cash transfers


• Price subsidies for food, electricity, or public transportation


• Public works


• Fee waivers and exemptions for health care, schooling and utilities

On average, spending on safety nets accounts for 1 to 2 percent of GDP across developing and transition countries, though sometimes much less or much more. Athough many safety net programs are extremely well thought out, correctly implemented, and demonstrably effective, many others have become expensive to maintain and present serious challenges.

Activity:
Many individuals have their own informal safety nets.  Perhaps you keep $20 hidden in your car's glove compartment, just in case you ever get stuck in a remote location without gasoline and you're debit card doesn't work. 
Using this example, briefly describe an informal safety net that YOU might consider.