Latin America’s demographic time bomb keeps ticking

Latin America’s baby bust is arriving early. Data published in the past few weeks confirm the quick decline in the region’s fertility levels, with the number of births in Brazil falling to the lowest in close to 50 years.

In Argentina, the number of newborns has almost halved in just a decade, with kindergartens struggling to find pupils. In 2024, Uruguay had more deaths than births for the fourth consecutive year. Even Bolivia, a country of traditionally large families, is about to fall below the 2.1 children-per-woman threshold necessary to keep its population constant.

Whether it’s Chile, Mexico or the Dominican Republic, you’ll find a similar trend of accelerated demographic changes driving the inexorable aging of society. According to a report by the United Nations’ Economic Commission for Latin America and the Caribbean, the region’s total population was estimated at 663 million persons last year, 3.8% below the projections presented in 2000.

As a result, by 2050 Latin America and the Caribbean countries may only contain around 730 million people instead of the more than 800 million estimated at the beginning of the century.

As dramatic as these changes are, they offer some good news: A more nuanced analysis would highlight some positive aspects of the birth rate decline, including a drop in teenage pregnancy — a historic problem in Latin America — greater awareness of contraception methods and more realistic parenthood planning. We are living longer so it’s only fair that women (and couples in general) have more control over their careers, reproductive health and budgets. Some would also cheer the lighter environmental footprint that comes with smaller-than-expected societies. At the same time, there is no hiding the phenomenal challenge these sharp demographic changes pose for businesses, families and policymakers in a region known for its poor long-term planning and bad strategic decisions.

While the aging population trend is global, Latin America faces it in a context of low growth rates, high inequality, disappointing productivity gains and deficient education and public spending systems. Advanced countries like Japan can rely on robots and technology to make up labour shortages. Fewer workers and consumers in Latin America raise the specter of stagnating economies and fiscal shortages even as accounts are already under pressure. Governments will need to smartly allocate resources for a future that will require more spending on healthcare and pensions and smaller budgets for child-related expenditures. Take the case of education: Fewer births bring an opportunity for public schools to invest more in each student, leading to a better integration of the child in less crowded classrooms and, potentially, increased future productivity. Governments and the private sector can do a lot to improve the training and living conditions of their future workers. If countries are having fewer babies, the goal should be to prepare them better, reducing poverty and infant mortality and investing more in childcare. In this crisis-prone region, a more prosperous overall macroeconomic environment would also do wonders to promote births by removing the financial overhang that affects many couples considering having children.

But reconciling sound policies with social demands isn’t easy. Migration is a point in case. Economists and demographers may say attracting foreign workers is a reasonable way of easing population pressure. Yet this progressive view scants the integration challenges associated with big migration waves. Chile’s recent census showed that most of the country’s population growth since 2017 is explained by migrants, who now represent almost 9% of the total population. A whopping 96% of Chileans in a poll last year said the country needed to implement more immigration restrictions. Finally, you have the human dimension of the declining fertility debate: Whether to have babies is one of the hottest debates of our times. If you don’t believe me, test drive that question with your group of friends and witness the passionate responses it triggers.

As a father of two, when I see cities like Buenos Aires already having more dogs than kids I can’t help but think that childless societies are less interesting and fun for families — with apologies to the pet lovers. I am also surprised about the growing animosity toward kids in a region that traditionally had reverence for family life. I recently took my children to see Shakira playing in Mexico City: She was fabulous, but the show started almost two hours late and my six-year-old fell asleep after a few songs. When someone dared to say that the promoters and performers should have stuck to schedule in a social media video, the backlash was furious: “Those places are not for children,” was the almost unanimous comment, as if the kids were unable to enjoy Shakira. Sure.

I get all the reasons not to have children in 2025 — it’s expensive, time-consuming, and can hurt professional careers or divert energy and attention from other life goals. For my humble two cents, the immeasurable upside of being a parent far outstrips its fully quantifiable costs, but you’ll only be able to confirm that by taking an irreversible step.

Personal choices aside, Latin America’s countries need to start getting ready for a world that doesn’t look so distant anymore and where everything, from consumption patterns to investment opportunities, will be hit by the new reality that we will live in much older communities. If your business targets the under-10, it’s time to rethink your strategy.