IS ARGENTINA PREPARED TO GET OLDER?

Written by Daniel Grünenfelder, STC, Embassy of Switzerland in Buenos Aires

Similar to the situation in mature economies the trend of an ageing society will also be on Argentina’s horizon in a not too distant future.

 2030: The End of a Young Society

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Source: United Nations, CEPAL

The increase of life expectancy is notable in Latin America and Argentina. Whereas in 1950 life expectancy was at 62,2 years, it is expected to increase up to 81,4 years by 2050 in Argentina. According to the most recent census (for the year 2010) of the National Institute for Statistics and Censuses (INDEC), the population over 65 years corresponds to 10,2%, the one over 60 years to 14,6% of the total population in Argentina. This makes Argentina the third oldest country in Latin America, just after Uruguay and Cuba. In the city of Buenos Aires, already 1 out of 5 persons is over 60 years old (21,66%). According to the Civil Association of Integrated Medical Activities (ACAMI), “[T]he ageing of the population represents the biggest economic and social challenge of the 21st century in Argentina.” But people not only get older, there is also a notable decrease in the birth rate, most of all in urban and economically and socially developed areas of the country. Due to this twofold development, the relation between the population over 60 years and below 10 years will gradually get inverted.

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Population structure by age and sex; year 2010 (Source: INDEC, Censo Nacional de Poblacion, Hogares y Viviendas)

This changing demographic – the ageing of society – is caused by a range of socio-economic factors, including a drop in birth rates and mortality. Developments in the standard of living conditions, healthcare such as medicine, housing, air quality and nutrition, as well as other economic, social, and political factors have extended the life expectancy in Argentina. Improved education and family planning have reduced the birth rate. As elsewhere, advances in modern medicine and technology are contributing to the ageing of society and to the challenges that come with it.

In Argentina the ageing characteristics have a distinctly urban profile, where the Federal Capital City of Buenos Aires has by far the highest percentage of people 65 years and older. The chart below compares the Capital with Argentina’s economically developed rural provinces.

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Source: INDEC, Censo Nacional de Poblacion, Hogares y Viviendas

Immediate Concerns

Currently, Argentina finds herself in economic difficulties with unemployment on the rise. To mitigate these layoffs, the government has launched a program to promote “early retirement” in the public sector, to be paid for from the proceeds of an imminent tax amnesty law for the disclosure of undeclared assets. With those tax revenues the government hopes to also settle pension debts with the many retirees who for years have not received the stipulated amounts.

Outlook / Contemplations on possible approaches

In the long run however, Argentina will have to grapple with the fact that the part of the economically inactive population will increase in relation to the active one. Besides immigration, part of the solution could be to increase the birthrate again by giving incentives such as the establishment of nurseries or the increase of parental leave.

Few and far between, individual policy makers call to think about how the challenges of an ageing society can be tackled through the use and development of technologies, since the two things are linked and could lead to symbiotic and complemental developments.

A potential field of action lies in the considerable sector of the informal job market which may in the short run be more effective before setting about to deepen the politically thorny and sensitive discussions of whether to increase the age of retirement.

Along with the necessity of a fundamental debate around an extensive normalization of the informal job market, and given the increasing life expectancy, an ex-minister of the Province of Santa Fe, Frederick C. Ensinck, argues, that there should be a discussion and focus on the educational system, in order for Argentina to be competitive in a modernizing global economy. In this context, the principal population segments to be taken into account first and foremost, are the ones still experiencing demographic growth and who at the same time are economically and socially at a disadvantage. Given that often the youth of those population segments are unable to finish their secondary education, the question is, what job and labor perspectives exist for them? A re-designed educational system needs to provide this generation with the necessary tools to cope with the social and economic transformations that are part and parcel of ageing society.

CEPAL, the United Nations Economic Commission for Latin America and the Caribbean advocates reducing the gender gap to increase productivity. Argentine women in their most productive working years (between 30 and 49 years) bring home only 52% of the men’s salaries. This difference is explained by the lower participation in the labor force; lower number of hours worked per week in the formal market, and the reduced monetary compensation women receive for per hour. Many women are domestic caregivers, providing benefits to their households through their unpaid work and increasing the productivity of the workers who are part of it. From the perspective of the national economy, the overall productivity of the population would increase if women participated in the formal labor market as much as men. A 2013 survey reveals that if it were possible to reduce the gender gap in labor income by increasing the salary of women from 52% to 68% of men, the impacts of an ageing population could be completely offset. Measures aimed at eliminating the gender gap provide an important set of policy options, among them the need for investment in the education of women and girls and the implementation of policies that promote a better balance in the distribution of productive and reproductive activities between men and women, as well as combating gender discrimination in the work place.

Final Considerations

It should be borne in mind that in Argentina, the family continues to play a very important role in these areas. It is not only cheaper to personally take care of older family members or to contract a care giver (often adding to the sector of informal work), than to place old people in an expensive retirement home, it also coincides with cultural norms. But eventually, the equations of a functioning health system, social services, infrastructure, and senior care will have to be adapted to the changing demographics.

Currently, there is no apparent public debate on the ageing of Argentine society, and one could think that Argentina has to focus on solving other, more pressing problems. Nevertheless, Argentine society is tacitly aware of the pressure generated by the demographic transition on public finances and on the economy as a whole. This pressure poses challenges for the country’s capacity to generate greater wealth to finance increased social spending in the short and medium term. This is evident when considering that the size of the labor force will tend to decline by mid-century. If this process is accompanied by policies that favor greater formality of employment and active ageing (leaving the workforce later than is currently the case), the effect of the transition on the labor market will be mitigated.

In Argentina, the social debate on ageing society is at best marginal and is not a prominent issue on the political agenda. Indeed, there is no specific awareness of the importance of applying information and communication technologies (ICTs) to improve elderly people’s life. The INTI (Instituto Nacional de Tecnologia Industrial) is one of the rare institutions, which incorporates research in technology to improve elderly people’s lives, among others. Moreover, it appears difficult to find adequate policies because of the very differing realities within the country. The measures will have to be specific to the need of the respective population segments.

Nevertheless, the PAMI (Instituto Nacional de Servicios sociales para Jubilados y Pensionados) has become a unique social model because of the complexity and variety of its services that other institutions do not offer. Indeed PAMI does not only focus on medical attention and technological advances. Rather it considers that a total integration of elderly people into the society encourage and procure their independence, autonomy and dignity, which are fundamental elements for a healthier and longer life. For those purposes, this institution provides preventive activities and “therapies” such as gymnastics, yoga, dance, walks, memory exercises, games, debates, manual activities, etc. in order to keep elderly people’s brain and body active.

And what are Mafalda’s thoughts?

Argentine 4.png

I would say that… But, better not touch upon this topic, right?

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