Past financial crises and periods of slow growth in developing countries show that economic downturns may impact the income of the poor less severely than that of the non-poor. However, given the paucity of their initial incomes, even small reductions in earnings impose a heavy toll on the poor.

Conditional Cash Tranfers have reduced inequality in three Latin American countries: Brazil, Mexico, and Chile. While they represent only a small share of total income, they have lead to a 21 percent drop in inequality in Brazil and Mexico, and to 15 percent reduction in Chile.