Demographic Changes in Latin America: The Good, the Bad and …
IMF Working Papers, April 13, 2017
Source details
- Canonical URL
- Demographic Changes in Latin America: The Good, the Bad and …
Other formats
Bibliographic details
- Authors: Santiago Acosta Ormaechea, Marco A Espinosa-Vega, Diego Wachs
- Published: April 13, 2017
- Series: IMF Working Papers
Methodology and scope
- Develops a simple, integrated methodology to project public pension cash flows and healthcare spending over the long term.
- Applied to the LAC5: Argentina, Brazil, Chile, Colombia and Mexico.
- Time horizon emphasized in the analysis: 2015-50.
- Purpose: provide a benchmark for assessing alternative reform scenarios, particularly in data-constrained countries.
Key findings and projections
- Public spending pressures in the LAC5 are expected to increase significantly over 2015-50 due to:
- demographic trends (aging), and
- rising healthcare costs (including the so-called excess cost growth factor of healthcare services).
- Public healthcare outlays in the LAC5 are likewise expected to increase significantly over 2015-50 for the same reasons.
- The simple integrated methodology yields projections that compare well with other approaches despite its simplicity.
Pension analysis and simulated reform scenarios
- Simulates alternative pension reforms, including:
- transition from a defined benefit (DB) to a defined contribution (DC) pension system, and
- the fiscal burden of a minimum guaranteed pension under a DC system.
- Analytical focus areas and terminology preserved exactly as used in the source: aging, cash flow, contribution rate, DB system, DC system, defined contribution, inflation rate, Pension spending, pension system, pension system reforms, Pensions, public pension spending, replacement rate, Retirement.
Healthcare analysis and policy levers
- Identifies the excess cost growth factor of healthcare services as a key driver of rising public healthcare spending.
- Policy implication highlighted: curbing the evolution of healthcare excess cost growth (for example, through enhanced competition in the healthcare sector) could aid in containing spending pressures.
Policy recommendations and applications
- Use the integrated methodology as a benchmark tool for:
- assessing alternative pension reform scenarios, and
- evaluating long-run public healthcare spending pressures.
- Consider reforms that:
- address pension system design (DB → DC transition considerations and implications of minimum guaranteed pensions), and
- contain excess cost growth in healthcare markets (for example, by enhancing competition).
Publication and metadata
- Authors: Santiago Acosta Ormaechea, Marco A Espinosa-Vega, Diego Wachs
- Date: April 13, 2017
- Series: Working Paper No. 2017/094
- Issue: 094
- Volume: 2017
- Pages: 48
- ISBN: 9781475594775
- ISSN: 1018-5941
IMF Working Paper: "Demographic Changes in Latin America: The Good, the Bad and …", Santiago Acosta Ormaechea, Marco A Espinosa-Vega, Diego Wachs, April 13, 2017 (Working Paper No. 2017/094).
Content in this bundle
- Demographic Changes in Latin America—The Good, the Bad and …, WP/17/94, April 2017