Growing Pains: Is Latin America Prepared for Population Aging?

By Lorenzo U Figliuoli, Valentina Flamini, Misael Galdamez, Frederic Lambert, Mike Li, Bogdan Lissovolik, Rosalind Mowatt, Jaume Puig, Alexander D Klemm, Mauricio Soto, Saji Thomas, Christoph Freudenberg, Anna Orthofer

April 5, 2018

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Lorenzo U Figliuoli, Valentina Flamini, Misael Galdamez, Frederic Lambert, Mike Li, Bogdan Lissovolik, Rosalind Mowatt, Jaume Puig, Alexander D Klemm, Mauricio Soto, Saji Thomas, Christoph Freudenberg, and Anna Orthofer. Growing Pains: Is Latin America Prepared for Population Aging?, (USA: International Monetary Fund, 2018) accessed December 21, 2024

Disclaimer: The views expressed herein are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper estimates the fiscal costs of population aging in Latin America and provides policy recommendations on reforms needed to make these costs manageable. Although Latin American societies are still younger than most advanced economies, like other emerging markets the region is already in a process of population aging that is expected to accelerate in the remainder of the century. This will directly affect fiscal sustainability by putting pressure on public pension and health care systems in the region that are already more burdened than, for example, in emerging Asia, a region with a similar demographic structure. A stylized cross-country exercise, drawing on demographic projections from the United Nations and methodologies developed by the IMF to derive public spending projections, is used to quantify long-term fiscal gaps generated by population aging in 18 Latin American countries. Several aspects of current pensions and health care systems in Latin Amer-ica make the region’s long-term fiscal positions particularly vulnerable to population aging.

Subject: Aging, Expenditure, Health care spending, Labor, Pension spending, Pensions, Population and demographics, Retirement

Keywords: Aging, Asia and Pacific, Central America, Contribution rate, DP, DPPP, Europe, Global, Health care spending, Minimum wage, Pension spending, Pension system, Pensions, Present discounted value, Private sector, Public spending, Rate of return, Replacement rate, Retirement, Retirement age, Sub-Saharan Africa

Publication Details

Pages:

195
Volume:

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DOI:

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Issue:

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Series:

Departmental Paper No. 2018/005
Stock No:

GPLAPPAEA
ISBN:

9781484326107
ISSN:

2616-5333

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