| Hello, *|NOME|* In addition to issues directly related to social mobility, IMDS has sought to bring demographic elements to a prospective analysis of social mobility in our country. In October 2023, in Issue No. 29 of our Letter, we posed a question about demography and economic growth: "Will we be able to get rich before we get old?" Basically, we presented the challenge of the current Brazilian youth, who should be adequately prepared to face the demand for productivity gains necessary to produce wealth in a country with a growing number of elderly people. We showed on that occasion that if Brazil today equalized the female participation rate to the male one, among young people aged 25 to 29, the Brazilian GDP would have an increase of 17% in 30 years, considering the permanence of this cohort in the labor market until the age of 54. We also show that, if Brazil could also instantly raise the schooling of young people entering the labor market (25 to 29 years old) to the level of Chile, the national GDP would increase by 25% in 30 years. If schooling reached the level of Korea, the growth would be 55%. Well, at that time we still did not have the demographic data of the Review carried out in 2024 by the IBGE, which was made public more recently and shows the projections of the Brazilian population until the year 2070. The data of this new Review reveal that after reaching its peak in 2041, with 220,425 million people, the Brazilian population will start to decrease, reaching 211,069 million individuals in 2060. Ten years later, in 2070, we will have less than 200 million (199,229 million), equivalent to the population of 2013. Six years before the population peak, in 2036, the WAP - Working Age Population - the population contingent that indicates the potential of labor that could be used in economic activity to generate wealth, will reach its maximum and start to decrease, totaling only 113,067 million in 2070. This demographic level is equivalent to our 2001 WAP. The Brazilian demographic change has been so drastic that we currently work with a birth rate of approximately 1.5 children per woman, which accelerates the aging process of our population, with significant effects on the sustainability of social security and social assistance, requiring urgent measures that promote the accelerated qualification of our young people and significant productivity gains. In twenty-five years, one out of every three Brazilians will receive long-term social security benefits and continuous cash benefits (CCB), and our working-age population (WAP) will be in sharp decline, as will our EAP - Economically Active Population. The projections made by the Ministry of Social Security are even more frightening. By 2070, the pension deficit will demand 7.4% of GDP, which is equivalent to the total spending on social security in countries older than Brazil. The aging of the Brazilian population reflects enormous social advances. After all, aging is only possible because we have reduced child and elderly mortality. It also stems from the silent revolution promoted by women, which drastically impacted the Brazilian fertility rate by having fewer children. In the 1950s, each woman had an average of 5.93 children. By the 1980s, this figure had dropped by 40%, to 4.12 children per woman. Twenty years later, in 2000, there was another drop of 40%, with the average rising to 2.39 children per woman. Nowadays, the fertility rate is 1.5 children per woman. This rate not only produces aging but also implodes the national population. Population ageing, combined with the reduction in the total active population, poses a huge challenge in terms of financing social security and health. Increasing portions of GDP will be required to sustain these expenditures, a drain of resources that diverts us from strategic investments for the country, such as in infrastructure, sanitation and science and technology, for example, which could severely limit Brazilian economic growth. In order for the remaining economically active population to be able to balance these figures, it will be necessary to significantly increase current levels of productivity, an objective that essentially depends on effective investments in educational policies. Once again, we observe that many of our challenges lead us to the same solution – education. This is also the key, central to promoting the social mobility that we so desire. If on the one hand, the small number of children poses an enormous challenge in demographic and fiscal terms, on the other hand, it is a colossal opportunity to form highly qualified youth, with real chances of having incalculable productivity gains, so as to face an increasingly competitive globalized world, allowing greater and more widespread social mobility. IMDS will continue to monitor the main changes in our demographics, always with a mind to increasing opportunities for youth and impacts on social mobility. See you in the next "IMDS Letter"! Paulo Tafner CEO |
