Demographic Transition and Post-Transition: Opportunities

and Challenges

Ricardo Paes de Barros Diana Coutinho

Rosane Mendonça

Mpumalanga, March 2014

Brazilian demographic transition

-10

-5

0

5

10

15

20

25

30

35

40

45

50

55

60

1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060

rate

s p

er

tho

usa

nd

pe

rso

ns

Brazilian Population Dynamics: 1880-2060

Source: SAE/PR based on population records and projections from IBGE

Crude birth rate

Crude death rate

Net migration rate

Natural growth rate

Population growth rate

Stage I Stage II Stage III Stage IV Stage V

2014

3%

2%

1%

0%

2%

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

4,5

5,0

5,5

6,0

6,5

7,0

1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060

Tota

l Fe

rtili

ty R

ate

(b

irth

s p

er

wo

me

n)

Actual and Predicted Evolution of Total Fertility Rate : Brazil, 1940-2060

40 years

1/3

6 births

2 births

2014

Source: SAE/PR based on population records and projections from IBGE

Fertility decline

Fonte: Growing old in an older Brazil : implications of population aging on growth, poverty, public finance and service delivery / Michele Gragnolati, et al. Washington D.C.: The World Bank, 2011. p. 12.

Brazil: Income and Private Consumption, 2008

Labor Income

Consumption

Economic dependency

Demographic bonus

0

10

20

30

40

50

60

70

80

90

100

110

120

130

140

150

1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060

po

pu

lati

on

(m

illio

n)

Evolution of the Brazilian Population by Age Groups: 1900 to 2060

Less than 15 or at least 60 years old

Between 15 and 59 years old

2014

Source: SAE/PR based on population records and projections from IBGE

Demographic bonus

0

10

20

30

40

50

60

70

80

90

100

110

120

130

140

150

1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060

po

pu

lati

on

(m

illio

n)

Evolution of the Brazilian Population by Age Groups: 1900 to 2060

Less than 15 or at least 60 years old

Between 15 and 59 years old

65million

2014

Source: SAE/PR based on population records and projections from IBGE

Demographic bonus

0

5

10

15

20

25

30

35

40

45

50

55

60

65

70

1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060

pe

rce

nta

ge o

f th

e p

op

ula

tio

n (

%)

Evolution of the Distribution of the Brazilian Population by Age Groups: 1900 to 2060

Between 15 and 59 years old

2014

Source: SAE/PR based on population records and projections from IBGE

Less than 15 or at least 60 years old

30 p.p.

Evolution of average schooling by birth cohort: Brazil

Born in 1980 in Brazil

Born in 1952 in Chile 28 years behind

Birth year

Ave

rage

sch

oo

ling

Human capital investment

Ensuring youth full development

0

10

20

30

40

50

60

70

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

Tho

usa

nd

s U

S$ (

20

05

) p

er

wo

rke

r p

er

year

The Evolution of the Average Labor ProductivitySelected countries: 1950-2011

Japan

Korea

Argentina

Brazil

Chile

China

Source: SAE/PR based on the Penn World Tables. Labor productivity as GDP/worker (Real GDP at constant 2005 national prices).

Labor productivity

0

10.000

20.000

30.000

40.000

50.000

60.000

70.000

80.000

0 10.000 20.000 30.000 40.000 50.000 60.000 70.000 80.000

Lab

or

Pro

du

ctiv

ity

in 2

01

1

(US$

(2

00

5)

pe

r ye

ar p

er

wo

rke

r)

Labor Productivity in 1980 (US$ (2005) per year per worker)

Ratio between labor productivity in 1980 and 2011

Brazil

Korea

Source: SAE/PR based on the Penn World Tables. Labor productivity as GDP/worker (Real GDP at constant 2005 national prices).

China

Labor productivity

0

5

10

15

20

25

30

35

40

45

50

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75

Ex

tre

ma

po

bre

za

(%

)

Idade

Extrema pobreza por idade: Brasil, 2009

Média nacional

Fonte: Estimativas produzidas com base na Pesquisa Nacional por Amostra de Domicílios (PNAD) de 2009.

Possibilidades de melhoria

Extreme poverty by age: Brazil, 2009

Age

Extr

em

e p

ove

rty

(%)

National average

Public and intergenerational transfers

0

5

10

15

20

25

30

35

40

45

50

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75

Ex

tre

ma

po

bre

za

(%

)

Idade

Extrema pobreza por idade: Brasil, 2009

Média nacional

Fonte: Estimativas produzidas com base na Pesquisa Nacional por Amostra de Domicílios (PNAD) de 2009.

Excluindo transferências públicas

Incluindo transferências públicas

Possibilidades de melhoria

Extreme poverty by age: Brazil, 2009 Extreme poverty by age: Brazil, 2009

Age

Extr

em

e p

ove

rty

(%)

National average

Including public transfers

Excluding public transfers

Public and intergenerational transfers

Fonte: Growing old in an older Brazil : implications of population aging on growth, poverty, public finance and service delivery / Michele Gragnolati, et al. Washington D.C.: The World Bank, 2011. p. 12.

Ratio of net per capita public transfers (elderly to children)

Public and intergenerational transfers

Fonte: Growing old in an older Brazil : implications of population aging on growth, poverty, public finance and service delivery / Michele Gragnolati, et al. Washington D.C.: The World Bank, 2011. p. 12.

Public Transfers as a Percent of Total Consumption

Public and intergenerational transfers

Fonte: Growing old in an older Brazil : implications of population aging on growth, poverty, public finance and service delivery / Michele Gragnolati, et al. Washington D.C.: The World Bank, 2011. p. 12.

Brazil: Expenditure per person by age group, 2006

Public and intergenerational transfers

Fonte: Growing old in an older Brazil : implications of population aging on growth, poverty, public finance and service delivery / Michele Gragnolati, et al. Washington D.C.: The World Bank, 2011. p. 12.

Brazil: Income and Private Consumption, 2008

Labor Income

Consumption

Public transfers and economic independence at older ages

Public transfers and economic independence at older ages

0

5

10

15

20

25

30

35

40

45

50

55

60

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

(%)

Anos

Evolution of the percentage of older persons in families with per capita income below his/her personal income: Brazil, 1981-2012

Source: SAE/PR based on PNADs (IBGE) from 1981 to 2012.

At least 70 years old

At least 60 years old

Health transition

0

5

10

15

20

25

30

35

40

45

50

55

60

65

70

75

80

85

90

1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060

Life

Exp

ect

ancy

at

Bir

th (

year

s)

Actual and Predicted Evolution of Life Expectancy at Birth: Brazil, 1910-2060

2014

1/2 extra year of life per calendar year

Source: SAE/PR based on population records and projections from IBGE

40

70

0

5

10

15

20

25

30

35

40

45

50

55

60

65

70

1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060

pe

rce

nta

ge o

f th

e p

op

ula

tio

n (

%)

Evolution of the Distribution of the Brazilian Population by Age Groups: 1900 to 2060

Under 15 years old

At least 60 years old

Between 15 and 59 years old

2014

Source: SAE/PR based on population records and projections from IBGE

Less than 15 or at least 60 years old

Population aging

0

2

4

6

8

10

12

14

16

18

20

22

24

26

28

30

32

34

36

38

40

1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060

Dis

trib

uiç

ão d

a p

op

ula

ção

(%

)

Evolution of the percentage of old-age population: Brazil, 1990-2060

At least 60 years old

At least 70 years old

Source: SAE/PR based on population records and projections from IBGE

2014

Population aging

0

2

4

6

8

10

12

14

16

18

20

22

24

26

28

30

32

34

36

38

40

1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060

Dis

trib

uiç

ão d

a p

op

ula

ção

(%

)

Evolution of the percentage of old-age population: Brazil, 1990-2060

At least 60 years old

At least 70 years old

Source: SAE/PR based on population records and projections from IBGE

2014

Population aging

Population aging

0

20

40

60

80

100

120

140

160

180

200

220

240

260

280

300

1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060

pe

op

le a

ged

65

an

d m

ore

pe

r h

un

dre

d c

hild

ren

Evolution of the number of people aged 65 and above per hundred children under age 15: Brazil, 1900 to 2060

2014

Source: SAE/PR based on population records and projections from IBGE

Population aging

0

20

40

60

80

100

120

140

160

180

200

220

240

260

280

300

1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060

pe

op

le a

ged

65

an

d m

ore

pe

r h

un

dre

d c

hild

ren

Evolution of the number of people aged 65 and above per hundred children under age 15: Brazil, 1900 to 2060

2014

Source: SAE/PR based on population records and projections from IBGE

Fonte: Growing old in an older Brazil : implications of population aging on growth, poverty, public finance and service delivery / Michele Gragnolati, et al. Washington D.C.: The World Bank, 2011. p. 12.

Number of years for population 65+ to increase from 7% to 14%

Speed of the population aging

Caring for dependent old-age persons

0

5

10

15

20

25

30

35

40

45

50

55

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

(%)

Anos

Percentage of old persons living in households without any person younger than 55 years old: Brazil, 1981-2012

Fonte: SAE/PR, com base nas PNADs (IBGE) de 1981 a 2012.

At least 60 years old

At least 70 years old

Challenges to public policy for a older population

1. Increase in life expectancy need to be accompanied by reduction in morbidity and expansion of the working life cycle.

2. Exponential increase in social security costs requires Brazil to adjust social security rules to the real needs and working potential of the elderly.

3. Adjustment must be fast, since the aging of the population has been very fast and it takes a life time to adjust.

4. Inevitable increase in health expenditures.

5. Increase in demand for long-term care for dependent old persons. Defining the roles for the family and public services.

Economic development and international migration

In 1900, Brazil has reached 7.3% of the

population composed of immigrants, today it

has just 0.3%.

International Migration to Brazil

Fonte: Censos Demográficos

RegionImmigrants

(millions)

Immigrants over

65 years old

(millions)

Immigrants over

65 years of age

as a percentage

of the immigrant

population

World 214 24,7 12

Africa 19 0,8 4

Asia 61 6,3 10

Europe 70 9,7 14

North America 50 5,9 12

Latin Amerrica and

Caribbean7 0,9 13

Oceania 6 1,1 18

Brazil 0,6 0,2 36

Age structure of immigrants in Brazil and in the World

5x

Latin America Average

10x World

Average

50x

North America and Oceania Average

Fonte: United Nations, Department of Economic and Social Affairs, Population Division (2009) e Pesquisa Nacional por Amostra de Domicílios (PNAD, 2009).

Economic development and international migration

Além da pouca mobilidade de pessoas, há pouca mobilidade de conhecimento

Quase 13 em cada 1000 residentes na Austrália estão estudando fora ou são

estrangeiros estudando no país.

No Chile, o número cai para 0,5; no Brasil, para 0,2.