Growing Pains: Is Latin America Prepared for Population Aging?

Departmental Papers, April 5, 2018

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Growing Pains: Is Latin America Prepared for Population Aging?

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Bibliographic details

• Authors: Lorenzo U Figliuoli, Valentina Flamini, Misael Galdamez, Frederic Lambert, Mike Li, Bogdan Lissovolik, Rosalind Mowatt, Alexander D Klemm, Mauricio Soto, Saji Thomas, Christoph Freudenberg, Anna Orthofer
• Published: April 5, 2018
• Series: Departmental Papers
• DOI: https://doi.org/10.5089/9781484326107.087

Summary and central findings

• The paper estimates the fiscal costs of population aging in Latin America and provides policy recommendations on reforms needed to make these costs manageable.
• Latin American societies are still younger than most advanced economies, but the region is already in a process of population aging that is expected to accelerate in the remainder of the century.
• Population aging will directly affect fiscal sustainability by putting pressure on public pension and health care systems in the region.
• Latin America’s pension and health care systems are already more burdened than, for example, in emerging Asia, a region with a similar demographic structure.
• A stylized cross-country exercise is used to quantify long-term fiscal gaps generated by population aging in 18 Latin American countries.

Methodology

• Demographic projections from the United Nations are used as inputs.
• Methodologies developed by the IMF to derive public spending projections are applied in a stylized cross-country exercise.
• The exercise covers 18 Latin American countries.

Fiscal impacts and vulnerabilities

• Population aging generates long-term fiscal gaps through higher pension and health care spending.
• Several aspects of current pensions and health care systems in Latin America make the region’s long-term fiscal positions particularly vulnerable to population aging.

Policy recommendations (high-level)

• The paper provides policy recommendations on reforms needed to make the fiscal costs of population aging manageable. (Specific reform measures are developed in the paper.)

Publication and metadata

• Authors: Lorenzo U Figliuoli, Valentina Flamini, Misael Galdamez, Frederic Lambert, Mike Li, Bogdan Lissovolik, Rosalind Mowatt, Alexander D Klemm, Mauricio Soto, Saji Thomas, Christoph Freudenberg, Anna Orthofer
• Publication date: April 5, 2018
• Series: Departmental Paper No. 2018/005
• Issue: 005
• Volume: 2018
• Pages: 195
• DOI: https://doi.org/10.5089/9781484326107.087
• ISBN: 9781484326107
• ISSN: 2616-5333
• Subjects: 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

Departmental Papers 2018, 005 — "Growing Pains: Is Latin America Prepared for Population Aging?"

Content in this bundle

• Growing Pains: Is Latin America Prepared for Population Aging? IMF Departmenal Paper No. 18/05
  • Growing Pains: Is Latin America Prepared for Population Aging? IMF Departmenal Paper No. 18/05 (Markdown version)
  • Growing Pains: Is Latin America Prepared for Population Aging? IMF Departmenal Paper No. 18/05 (PDF)