The demographic bonanza

THE DEMOGRAPHIC BONANZA

SurEconomics staff, August 2026

Latin America's engine of youth shut off before we could enjoy the economic blessings of an exceptional demographic dividend.

In 1970, the average Latin American woman had 5.5 children; today that figure has plunged to 1.8. This population replacement rate is below the minimum levels desirable for economic development (2.1).

Countries such as Chile, Costa Rica, Brazil and Uruguay register very low birth rates, similar to those of Japan or Italy, but with a dramatic difference: Europe grew old while rich; Latin America is aging with precarious health systems and informal employment.

In just 15 years, the number of people over 65 in the region will double, rising from 58 million to 115 million.

The macroeconomic problem is that 53% of current workers operate in the informal economy, not contributing a single cent to social security funds.

Who will pay for the pensions and medical care of that huge mass of elderly people in 2040?

Without accumulated savings or high productivity, Latin America's demographic dividend has slipped through our fingers.

Sources

·       CELADE - Population Division of ECLAC. Demographic Transformations in Latin America, 2025.

·       World Bank. The End of the Demographic Dividend and the Pension Challenge, 2025.

·       La Tercera. "Latin America Is Aging at a Record Pace: The Economic Consequences," May 19, 2026.