In 2050, Brazil Will Be a Graying Nation
What crisis? Such was the rhetorical question posed by The Economist in June 2009. The British magazine was citing an IMF report that compared the costs of the financial crisis with the costs of the aging crisis. According to the IMF, the cost of the global recession for public finances is only 10% of the cost represented by aging populations. Rich countries face a formidable challenge, tougher than even the crisis itself. However, the demographic future in store for developed countries has been clear for quite a while.
But what about developing economies? Is aging a prerogative of rich countries? No, aging has become a global phenomenon. According to the demographic estimates made by Lutz and his team, and published in Nature in 2008, the average age of the world population will be 31.3 years in 2010. The forecast for 2050 is that it will climb to 38.8 years. At the end of the century it could hit 45.5 years. So global aging is a fact. If Japan and Western Europe are the precursors, China and Latin America are not far behind. It's simply a consequence of the demographic changes linked to the development process. Differences in demographic transition among countries are mostly about the starting date and the rapidity of change.
Take Brazil: it's a country we naturally associate with youth and euphoria, and also with child poverty. But even in Brazil an aging population will be a substantial burden in the coming decades. In 2003, for instance, Brazilian public spending for pensions had already risen to 12% of GDP, with people over 60 accounting for 8.6% of the total. By contrast, public spending for education is only 4.6% of GDP, in spite of the fact that the population under 15 is 27.2 % of the total. According to forecasts made by IBGE, Brazil's statistical agency, in 2050 there will be 215 million Brazilians. Only 13.1% of them will be aged 15 or less, while almost 30% of Brazilians will be aged 60 years or older. So current trends in public spending are clearly not sustainable.
Will the Latin American giant be able to face the challenges posed by the graying of the population? Will it be able to muster the political consensus needed to make the necessary reforms? Be it Italy or Brazil, the future of a society depends on population trends. That's why Bocconi researchers are at the frontline of social research to understand how demography, economy, society are interacting to shape our collective future.