Latin America, while still comparatively young, is aging fast. Our research finds that population aging is challenging the fiscal sustainability of public pension and health care systems in the region.

Policymakers will need to ensure adequate benefits for the rising share of older people—notably their social acceptability—by supporting formal employment and gradually reforming pension and healthcare systems.

Demographic dividend

Latin American countries are still younger than most advanced economies, but population aging is expected to accelerate. Today Latin American women have on average a little more than two children per woman. That is three times fewer than in 1950! Even in Guatemala and Bolivia, the two countries in the region with the highest fertility rates, the number of children per woman has started to fall rapidly. At the same time, people are living longer.

Rising living standards and better access to quality health care have increased the life expectancy of Latin Americans to close to 75 years. Chileans and Costa Ricans can expect to live more than 80 years, slightly longer than United States residents.

The combination of fewer children and older adults is putting an end to the demographic dividend that Latin America has been enjoying since the 1970s—that is the period during which the population aged between 15 and 64 grows faster than the population younger than 15 and older than 64. Its end implies there are fewer active people to support a growing number of dependents.

Countries with the youngest populations like Paraguay, Bolivia, and Guatemala may still benefit from the dividend until 2045, but Uruguay, Brazil, and Colombia have only a couple of years of dividend left, while the dividend is already over in Chile and Costa Rica.

Read the full news in The Financial

Latin America, while still comparatively young, is aging fast. Our research finds that population aging is challenging the fiscal sustainability of public pension and health care systems in the region.

Policymakers will need to ensure adequate benefits for the rising share of older people—notably their social acceptability—by supporting formal employment and gradually reforming pension and healthcare systems.

Demographic dividend

Latin American countries are still younger than most advanced economies, but population aging is expected to accelerate. Today Latin American women have on average a little more than two children per woman. That is three times fewer than in 1950! Even in Guatemala and Bolivia, the two countries in the region with the highest fertility rates, the number of children per woman has started to fall rapidly. At the same time, people are living longer.

Rising living standards and better access to quality health care have increased the life expectancy of Latin Americans to close to 75 years. Chileans and Costa Ricans can expect to live more than 80 years, slightly longer than United States residents.

The combination of fewer children and older adults is putting an end to the demographic dividend that Latin America has been enjoying since the 1970s—that is the period during which the population aged between 15 and 64 grows faster than the population younger than 15 and older than 64. Its end implies there are fewer active people to support a growing number of dependents.

Countries with the youngest populations like Paraguay, Bolivia, and Guatemala may still benefit from the dividend until 2045, but Uruguay, Brazil, and Colombia have only a couple of years of dividend left, while the dividend is already over in Chile and Costa Rica.

Read the full news in The Financial