## Demographic Changes in Latin America: The Good, the Bad and …

_IMF Working Papers, April 13, 2017_

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## Bibliographic details
- Authors: Santiago Acosta Ormaechea, Marco A Espinosa-Vega, Diego Wachs
- Published: April 13, 2017
- Series: IMF Working Papers

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### 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).*

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## Content in this bundle

- **Demographic Changes in Latin America—The Good, the Bad and …, WP/17/94, April 2017**
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_Source: https://www.imf.org/en/publications/wp/issues/2017/04/13/demographic-changes-in-latin-america-the-good-the-bad-and-44836_