As time goes by in Argentina: economic opportunities and challenges of the demographic transition

This publication studies the opportunities and challenges that the demographic transition poses for the Argentine economy, its most important social sectors like the healthcare, education, and social protection systems, and the potential fiscal trade-offs that must be dealt with. The study shows that even though Argentina is moving through its demographic transition, it just recently began to enjoy the window of opportunity and this constitutes a great opportunity to achieve an accumulation of capital and future economic growth. Once the window of opportunity has passed, population ageing will have a significant impact on the level of expenditure, especially spending in the social protection system. This signifies a challenge from a fiscal policy point of view, because if long-term reforms are not undertaken to mediate these effects, the demographic transition will put pressure on the reallocation of fiscal resources among social sectors. Finally, population ageing poses concerns related to sustaining the rate of economic growth with a smaller working-age population. Taking advantage of the current window of opportunities, increasing savings that will finance the accumulation of capital, and increasing future labor force productivity in this way is a challenge for the Argentine economy.