ABSTRACT
Latin America underwent rapid changes in population age structure, moving from a young age structure to an older one, starting in the second half of the past century. However, the onset of the demographic transition and its pace varies across countries, and in response each country has assumed different public policies. The implementation of private pension systems in some countries stands out. These have been in place since the 1990s, but all have recently undergone several reforms. The demographic changes have important implications because the region is marked by large socioeconomic inequality and is not fully prepared for the higher fiscal costs that ageing imposes. We discuss this situation together with intergenerational transfers and public policies (social security and health) in the region. To help Latin America prepare for the negative effects of ageing we propose the inclusion of women in the formal labor market to extend the demographic dividend; the increase of childcare to free women’s time; and the formalization of the labor market, which would increase contributions to the social security system and possibly increase the saving rate.
