Population aging, a direct consequence of the demographic transition, is often portrayed in negative, even dire terms. This chapter examines some of the probable effects of population aging in Latin America within the framework of the National Transfer Accounts (NTA) project (NTA 2010). The starting point is the NTA estimates of the life-cycle deficit and intergenerational transfers in five countries: Brazil, Chile, Costa Rica, Mexico, and Uruguay. This information is then combined with long-term demographic trends, primarily in age composition, to estimate expected effects on the economy. These effects, also known as “demographic dividends” (e.g., Mason and Lee 2007), are both positive and negative, meaning that population aging in the region involves not only challenges and constraints but also opportunities for development and gains in standards of living.
