The fiscal impact of population aging in Brazil: 2005-2050

Abstract

In this paper, we estimate the fiscal impact on population aging in Brazil from 2005 through 2050. We focus on three key areas of public spending: education, pensions, and health care. Our projections are based on a simple model in which aggregate public expenditures are driven by changes in the age structure of the population as well as by changes in the average public benefits received per age. We assess the likely increases in public spending over the coming decades, contrasting the divergent trends in public spending on education, pensions, and health care. We also assess the magnitude of these changes in terms of growth in spending relative to GDP annually through 2050 and estimate the present value of the increase in spending. We find that changing population age structure will lead to increasing cost pressures in health care and especially in pensions. Our projections show that beginning around 2015, public spending will begin a sustained and rapid increase lasting several decades rising from 18% of GDP to reach 27% of GDP by 2050. The needs for increased investment in students will compete against those for sustaining pension benefits and facing increasing demands for health care. In particular, our projections show that an ambitious educational reform aimed at reaching the OECD level of investment per youth within a decade would amount to only about one fourth of the projected cost increases in public health and pension programs.

Accounting for Growth Effects of Age Structure Transition through Public Education Expenditure: New Macroeconomic Evidence from India

“…Empirical studies which focus on impact of demographic changes on public education spending include Poterba (1997, 1998) for the USA, Grob and Wolter (2005) for Switzerland, Lee and Mason (2014) for 40 Asia and Pacific countries, Marchionni and Alejo (2015) and Gragnolati and Troiano (2015) for Argentina, and Miller and Castanheira (2013) for Brazil. In general, this literature shows the negative impact of demographic changes (e.g., age structure transition, population ageing and decline in fertility) on per pupil public education expenditure and distinguishes the sources for this impact through a decomposition analysis.…”

“…Gragnolati and Troiano (2015) and Miller and Castanheira (2013) analyse, among others, the implications of demographic transition on education (i.e., school education) through a decomposition of the share of public education expenditure as a percentage of GDP by demographic component (measured by population at each age relative to the working-age population) and economic/policy component (measured by average annual public benefits received at each age relative to GDP per working-age adult). This decomposition is useful to understand the importance of age structure in translating social effort (aggregate spending) into individual welfare (spending and measuring benefits relative to GDP per working-age adult.…”

Demographic Changes in Latin America: The Good, the Bad and …

“…We acknowledge that more detailed and complex models may produce more accurate results, particularly over the short run. However, a larger set of variables at the projection stage adds complexity and uncertainty, lessening the advantages of data-intensive models over the longer run relative to those that require fewer variables to project-a problem known as data overfitting (Goldstein & Gigerenzerb, 2009;Miller & Castanheira, 2013). Since our goal is mostly to assess long-term trends, our simplified approach suffices for our purposes.…”

Diretrizes e indicadores de acompanhamento das políticas de proteção à saúde da pessoa idosa no Brasil

“…Em razão dessas mudanças, a saúde da população idosa se tornou um dos problemas mais importantes para a investigação e o planejamento de políticas públicas. Na verdade, a pressão orçamentária sobre o sistema de saúde relacionada ao aumento da população idosa com DCNT, às limitações provocadas por elas e à perda de anos de vida saudáveis é considerada por muitos pesquisadores como um dos principais fatores para o equilíbrio fiscal do Estado brasileiro nos anos vindouros [4][5][6] .…”