Age-structural-transition in Brazil: demographic bonuses and emerging challenges

Laura R. Wong, Centro de Desenvolvimento e Planejamento Regional (CEDEPLAR)

Two aspects of the Brazilian age structural transition (AST) are considered: (a) its impressive speed; (b) its presence in all its sub-regions characterized by large socioeconomic differences. Some of the strongest, mostly positive, AST effects are discussed. The ratio of the junior labour force to the mature labour force (a proxy of the pressure for generation of new employments) has a downwards trend. This is another potential demographic bonus that can be claimed if full employment and higher productivity are pursued. As a necessary although not sufficient condition to achieve socioeconomic and intergenerational balance, labour force skills should be at their higher levels. Also due to the AST, new challenges emerge: older population will certainly expand. The simulations shows that the difference between age-related government expenditures and revenues would increase considerably and the fiscal deficit will become unbearable if current per capita government transferences are kept constant.