Publication: Demographic Change in Uruguay: Economic Opportunities and Challenges
Date
2016-05-26
ISSN
Published
2016-05-26
Author(s)
Abstract
Uruguay’s population is slowly aging, driven by the demographic transition that started early in the
20th century. While this reflects significant improvements in mortality and fertility trends, it also creates
important challenges for the fiscal sustainability of some social policies and for sustaining medium- and
long-term economic growth. Uruguay is going through the “demographic dividend” stage of this process
as the proportion of the population ages 15–65 peaks. This temporary situation creates the possibility of
increasing the endowment of capital and the labor force and sparking sustained economic growth. For
this to happen, institutional, financial, and fiscal conditions are needed that promote larger savings
and investment.
Demographic Change in Uruguay: Economic Opportunities and Challenges studies the opportunities and
challenges that the demographic transition poses for Uruguay’s economy. Once the demographic dividend
has passed, population aging will have a significant impact on fiscal accounts, especially in social protection
expenditures. This is a serious policy challenge, demanding reforms to adapt the institutions and systems to
a new demographic context. The main challenge in the next few decades will be to maintain economic
growth on a solid path as the working-age population declines. This will require that labor force participation
rates increase, particularly among women and older people, but will also require that those in the labor
market increase their productivity. This will be achieved only through sustained growth of the capital per
worker ratio and the incorporation of innovations and technological developments that facilitate increased
production of goods and services for the entire population.
Citation
“Rofman, Rafael; Amarante, Verónica; Apella, Ignacio. 2016. Demographic Change in Uruguay: Economic Opportunities and Challenges. Directions in Development--Human Development;. © Washington, DC: World Bank. http://hdl.handle.net/10986/24358 License: CC BY 3.0 IGO.”
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