Social protection in urban settings: Three lessons learnt

Article originally published in the public group on Social Protection

Urbanisation is a global mega-trend that will continue to characterise the 21st century. In 2018, 4.2 billion people lived in urban areas ­– around 55% of the global population. This figure is set to peak at 2.5 billion by 2050 – representing an estimated 68% of the world’s residents.¹

Most developing countries lack bespoke policies, strategies, coordination mechanisms, or financing structures to provide social protection to urban residents, many of whom are informal workers. As a result, social protection systems are often ill equipped to address the needs of poor and vulnerable urban residents.

A review of challenges in extending social protection to urban populations directs to three main lessons.²

1. Coverage of social protection measures, including social assistance, social insurance, social care, and active labour market programmes (ALMP), is low in urban areas.

Poor and vulnerable people are frequently excluded from both social assistance and social insurance programmes. Many policymakers have held concerns which may not always materialise and yet have hindered the expansion of social assistance measures into urban areas. This includes the fear that such assistance would incentivise massive migration to urban areas; and a general perception that rural poverty is more severe. Urban coverage has also suffered where political economy factors and electoral preferences favour rural constituents. Where social protection initiatives do exist in urban areas, they are often part of a rural programme or other replicating features such as eligibility criteria and transfer levels which have been designed for rural beneficiaries.

2. Urban social protection schemes present an array of challenges at each step of the delivery chain.

The varying characteristics of urban residents mean that replicating programme components which have been designed specifically for rural residents – including eligibility criteria, targeting mechanisms, verification processes, transfer levels, and payment mechanisms – may not be effective. Identification and registration are important aspects to consider, not only in terms of coverage, but also with regard to assessing needs and defining eligibility. Similarly, targeting mechanisms often used in rural areas – such as proxy means testing (PMT)³ and community-based targeting – may be ill-suited to urban contexts.

3. While support for urban dwellers and enhanced social protection systems are strong policy priorities for international actors, there are limited policy linkages between the two.

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At global level, the SDGs do not incorporate a focus on social protection for urban residents.⁴ The New Urban Agenda – which is intended to act as an accelerator for implementing the urban dimensions of all SDGs – likewise does not specifically reference urban social protection. The lack of linkages between urban dwellers and social protection is also reflected in policies and strategies of many major international development partners.

Recommendations

A roadmap to strengthen social protection for urban residents should draw on the following priorities, depending on the needs of the local context:

• Improve the enabling environment for urban social protection.⁵
• Enhance transparency and provide information to all citizens on the registration process and design elements of urban programmes (e.g. eligibility criteria, purpose, transfer levels).
• Broaden the base of poor and vulnerable urban households that are registered in a national database or social registry – not all of whom will necessarily be registered for a programme.
• Carefully consider the optimal method to find and assess poor and vulnerable urban households for registration for social assistance programmes, and then ensure that programme eligibility criteria reflect the complex dynamics of urban poverty and vulnerability.
• Provide social assistance benefits that are responsive to individual and household needs and urban contexts.⁶
• Strengthen the delivery systems for urban social protection.⁷
• Expand social insurance to informal workers as part of a coherent and comprehensive approach to social protection for all workers.⁸
• Fortify the technical capacities of national actors involved in the design, implementation, monitoring, and evaluation of urban social protection, including civil society.
• Ensure that all urban social protection initiatives incorporate cross-cutting issues such as monitoring and evaluation, accountability, localisation, climate change, shock response, gender equity, social inclusion, and sound political economy analysis which recognises the potential pitfalls of “best practice” reforms.

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DISCLAIMER: The information provided is based on the content of the thematic paper Changing landscapes: Urbanisation and social protection and should not be interpreted as the official view of the European Commission. This article was produced in collaboration with the social protection and urbanisation expert Edward Archibald, author of the thematic paper.

1 Of the increase in the urban population globally, 90% will take place in Asia and Africa. The number of people living in slums will remain especially high in sub-Saharan Africa. In this context, the increasing urbanisation of poverty and shocks are closely related. The geographic distribution of poor people is concentrated in medium and small towns rather than larger cities, not following better socioeconomic opportunities usually located in larger cities. Urban poor are often vulnerable to shocks and with less access to medical care, posing multidimensional complexities for policymakers. Youth unemployment, child mortality, volatility of income, precarious work conditions and the cost of living in urban settings are particularly alarming.

2 These lessons are drawn from a thematic paper produced for the Directorate-General for International Partnerships (DG-INTPA) and EU Delegations – with support from the INTPA.D4-managed Methodological Knowledge Sharing (MKS) Programme – entitled Changing landscapes: Urbanisation and social protection. The aim is to guide and improve social protection programming within the European Commission´s programming phase 2021-2027.  The paper is available to staff of DG-INTPA and EU Delegations.

3 Proxy means testing is a methodology that estimates household income by associating indicators or ‘proxies’ with household expenditure or consumption.

4 SDG 1 (poverty reduction) includes social protection in broad terms without specifically mentioning urban (or rural) populations (target 1.3), and SDG 11 (cities and human settlements) only mentions access to housing and basic services (target 11.1).

5 This can be achieved through participatory processes which formulate and operationalise urban policies; urban-specific coordination mechanisms; and public financial management approaches which support urban needs through mobilising revenue, allocating funding, and executing budgets.

6 This includes the recognition that urban areas have higher expenditures and more nuanced vulnerabilities than rural areas, and using appropriate transfer methods.

7 This includes integration of data on urban-specific poverty, vulnerability, and shocks into social registries; and developing bespoke infrastructure including payment mechanisms, grievance redress, and M&E.

8 This could potentially include changes to legislation, regulations, or programme eligibility criteria; facilitating or subsidising contributions for certain categories of workers; and systems strengthening.