The impact of population aging on social security and care demands in the Southern Cone

Abstract

This paper examines convergences and divergences of the aging process in countries of the Southern Cone (Argentina, Bolivia, Brazil, Chile, Paraguay and Uruguay), and investigates possible demands and effects this trend will have on the pension system, and on long-term care services. The countries that initiate the process of aging earlier (Uruguay and Argentina) will lose relative position in this process, due to slower reductions in fertility rate. Brazil and Chile have experienced sharper decreases in fertility, would lead the ranking of the oldest in 2050. With the aging population, the resources required to sustain the pension systems will increase significantly. The informality of the Latin American labor market and the aging population will compromise the financial sustainability of the purely contributory pension systems. On the other hand, demographic changes indicate that the demand for care will increase markedly, while the availability of caregivers will decrease steadily, and it will be necessary to discuss future care policies.