Abstract
This article considers how changes in Latin American countries’ age structures may affect their long-term economic performance through the impact on labor supply, dependency ratios, and productivity. It analyzes fourteen Latin American countries using population projections for 2015–2050 and considering three scenarios. The basic scenario assumes constant sex- and age-specific behavior concerning employment, while the other two scenarios imply increases in female activity rates and significant human capital accumulation. The results illustrate the heterogeneity of Latin American countries. In some of them, major productivity increases can only be achieved through substantial changes in the incorporation of women into the labor market, and especially in the educational level of the population as a whole. However, in most of the region’s countries, the demographic factor is still favorable and there is scope to exploit the demographic dividend.
Highlights
Este artículo analiza cómo los cambios en las estructuras de edad de los países latinoamericanos pueden afectar su desempeño económico a largo plazo, a través del impacto en la oferta laboral, las tasas de dependencia y la productividad
We use population projections from the United Nations (UN) Population Division; activity rates and wages by sex and age group are taken from household surveys for the year 2015 or the closer year available for each country
When we consider population projections by the Wittgenstein Centre, used in scenario 3 to reflect changes in educational attainment, we find that in Guatemala the educational level is significantly lower than the other countries, with two-thirds of its population having primary education or less
Summary
Este artículo analiza cómo los cambios en las estructuras de edad de los países latinoamericanos pueden afectar su desempeño económico a largo plazo, a través del impacto en la oferta laboral, las tasas de dependencia y la productividad. We use population projections from the United Nations (UN) Population Division; activity rates and wages by sex and age group are taken from household surveys for the year 2015 or the closer year available for each country.3 Because labor force participation rates by age and productivity levels are not modified in this scenario, results exclusively reflect the effect of population size and age structure.
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