Demographic transition in South America: from demographic window to population aging

By Mario Bazán

South America will go from 399 million to 520 million inhabitants between 2010 and 2050. Whereas the minors of 15 years happen to be 27 percent of the population to 17 percent, the majors of 65 years will happen to represent 7 percent 20 percent of the population of the region between these years.

The population of South America is set to expand by 90 million people in the next 40 years. As the demographic structure of the region shifts, governments will have to account for this growth when planning and designing long-term public policy. The principal changes anticipated are: declining birth rates, the predominance of working-age people (between 15 and 65 years old), the relative aging of the population, and greater urbanization.

These long-term tendencies predict a radical shift in the status quo. Between 1970 and 2010, the regional population grew by nearly 200 million people—from 191 to 393 million. This growth has created a demographic structure in South America commonly known as the demographic window: for several years, working-age people will predominant as a proportion of total population, accompanied by falling demographic dependency ratios—the number of people under the age of 15 or over the age of 65 relative to the working-age population.

The demographic dependency ratio is already falling and will continue to fall until 2025, when it is expected to bottom out and start to creep upward (see figure 1). According to the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), there were 8.3 dependents for every 10 working-age people in 1970, compared to 5.1 dependents in 2010. The commission expects 2025 to be the low point in dependency and high point in productive capacity, with only 4.7 dependents for every 10 working-age people. By 2050 the dependency ratio is expected to return to 2000 levels - about 5.7 - as the population ages. These demographic shifts imply that the 50-year span from 2000-2050 represents the region’s demographic window, its opportunity to harness peak productive capacity to accumulate financial resources, transform its institutions and accelerate economic growth.

FIGURE 1. Population by age and dependency rate in South America (1970-2050)

Source: ECLAC (ECLACSTAT)

One of the main differences between the last 40 years and the next 40 is the shift from a predominantly young to a predominantly elderly population. The last four decades saw rapid population growth and, consequently, a high ratio of youths under the age of 15. Between 1970 and 2010, the number of people in that age group grew from 79 million to about 107 million, representing 41 percent and 27 percent of total population, respectively. The youth age group is expected to decline in size and as a proportion of society beginning in 2010, however. The number of people under the age of 15 will fall to 97 million—20 percent of total population— by 2025, and will continue to fall to 86 million by 2050 —16 percent of total population. Inversely, in the past four decades the number of people over the age of 65 grew from 7 million in 1970 to 27 million in 2010, representing 4 percent and 7 percent of the total population, respectively. This age group will continue to grow to 50 million people by 2025 and 103 million by 2050, representing 10 percent and 20 percent of total population, respectively.

Population growth in the next four decades will continue to occur in urban areas, as it has for four decades. This does not necessarily imply a significant drop in the number of people living in rural areas, however, only a reduction of their size relative to the rest of the population. The urban population tripled between 1970 and 2010, from 112 million to 332 million, and it is expected to reach 398 million by 2025. By 2050 the urban population will grow to 457 million people, or 87 percent of the total population. By contrast, the size of the rural population relative to the rest of society has fallen dramatically from 41 percent to 18 percent between 1970 and 2010. Yet total rural population was fairly steady over the period, falling from 80 million to 68 million people. This trend is expected to continue: the rural population will fall to about 65 million people by 2025, where it will hold steady until 2050. Yet its relative size will fall from 14 percent to 12 percent of total population, respectively.

These anticipated demographic changes require shifts in social, economic, and urban planning policy. A few measures for policy-makers to consider:

• The reduction in the youth population will require shifts in health and education policy. The current focus on increasing health and education services to cover more children will decline in importance, allowing for a renewed focus on the need to improve the quality of these services.

• The aging of the population will require a shift in social policy to protect and provide for the elderly. The region will only be able to meet these future social welfare demands if it takes advantage of the current demographic window to save for the future. If the region misses the opportunity to generate surpluses now, living standards achieved during the demographic window will erode. 

• Population growth will put more pressure on rural areas. The continued growth of major cities, the consolidation of intermediate cities and the rise of new cities will all encroach on sparsely populated rural areas. Urban growth also provides opportunity, however, boosting demand for food products and recreation land and giving rural areas the chance to revalue their agricultural, environmental, and ecological products and services. The challenge for rural areas will be to maintain their ecosystems, agricultural biodiversity, soil quality, and water supply, while simultaneously increasing the living standards in these zones.

• Rapid urban growth means cities, especially the region’s vast megalopolises, face increased levels of violence and criminality, shortages of basic resources like energy, water, infrastructure and housing, and more waste and contamination. To overcome these challenges, the region must meticulously plan the expansion of its cities and map out intermediate cities to reduce the pressure on existing urban areas.

The transformations expected in South America require an immediate rethinking and reinterpretation of basic concepts like economic growth, development, sustainability, cultural exchange, social welfare, social responsibility, property, and frontiers, among others. These concepts can provide a basis for designing long-term, strategic options for the region. To be successful in the next half century, governments must develop or recuperate their capacities for long-term strategic planning and for identifying challenges and opportunities in the demographic shifts to come.