Census: Opportunities and challenges of demographic bonuses – 06/28/2023 – Market

Demography and economics are two deeply related fields. But while the economic dynamic oscillates and changes direction quickly, as in the maneuvers of a jet ski, the demographic dynamic is closer to the constancy and stability observed in the route of a transatlantic. It is easier and more accurate to track the long-term navigation of demographics than the economy.

In this sense, the drop in the pace of population growth does not come as a surprise to demographers. But the number of 203 million Brazilians, indicated by the 2022 Census, brought a certain astonishment and the country’s social scientists will have to look into the new numbers from the IBGE (Brazilian Institute of Geography and Statistics) to understand the accuracy and assertiveness of the data.

Undoubtedly, absolute numbers are important, but if inaccuracies exist, they can be corrected by statistical modeling or other information from administrative records. Soon, we will be able to assess the relative numbers and the data from the 2022 Census will serve to update the sample of the other IBGE household surveys. But it should be warned that it would be simplistic to consider that the total population of the Census means that Brazil will have a higher per capita income and a lower unemployment rate. The account is more complex.

What is clear and certain is the continuity of the demographic transition –reduction in birth and mortality rates– and the change in the Brazilian age structure. These phenomena create opportunities and challenges.

The first major opportunity is to reduce the percentage of children and young people, which brings unquestionable benefits. Smaller families allow parents to switch from investing in quantity to investing in their children’s health and education, increasing per capita spending per child. Healthier and more educated young people have greater citizenship rights and contribute to their families and country.

The second big opportunity is the exchange of the unlimited supply of labor for the demographic bonus. The window of opportunity created by the transition in the age structure temporarily increases the labor supply. So the country has a specific period to take a big leap in economic and social development.

Data from the 2022 Census show that the end of the first bonus is closer, but the country still has high open unemployment, a large number of underemployed people and a huge contingent of informal workers. Therefore, the challenge is not to increase the population, but to put into practice Full Employment and Decent Work, the famous and urgent flag of the ILO.

On the other hand, the great challenge comes from the population aging process, which is an inevitable consequence of the demographic transition. The percentage of people aged 60 and over will exceed 40% of the total population in the last decades of the 21st century. There will be fewer people of working age and more people of retirement age. This process is inevitable and universal.

The solution to this challenge lies in the second demographic bonus (productivity bonus) and the third demographic bonus (longevity bonus). Reduced worker volume can be offset by more productive workers who produce more with less. The increase in the number of elderly people can be beneficial if we rely on healthy and active aging, as the large contingent of elderly people should be seen as an asset, not a liability.

The first data from the 2022 Demographic Census are already giving us a lot to talk about. But the bulk of the information will still be released in the coming months. Brazil had a very troubled Census. The IBGE did the best it could under the circumstances and it is with this Census that we will know the demographic, social and economic profile of the country. More efficient public policies and effective investment decisions by the private sector depend on a good analysis of data from the recently completed Brazilian census.