The Impact of Social Safety Net Programs on Household Savings in Colombia

This paper seeks to understand and quantify how social safety net programs impact household savings in developing countries, considering the case of Colombia using two complementary approaches. The first approach explores how the health regime affects savings in the country. The second evaluates the impact on savings of familias en accion, a major antipoverty conditional cash transfer program. The results suggest that the savings of informal households are higher than those of formal households, because, with little incentive to enter the formal job market, informal households need to cover slightly greater non-covered risks. The results also show that familias en accion recipients save more than non-recipients because recipients favorably adjust their expenditure patterns.