He National Institute of Statistics (INE) released preliminary data on 2023 Censuswith a population estimated at Uruguay of 3,444,263 people. The population is barely 1% higher than that of the previous Census (2011), which implies that the annual growth rate is less than 0.1%, almost zero. And the most relevant thing: the figure is 122,287 people lower than the projections that were used until now for this year’s population, and implies an important change for the new demographic projections, with relevant consequences on social and economic issues.
Based on more exhaustive analysis, it seems clear that Uruguay It accompanies—and quite strongly—the trends that are occurring in the most advanced Western societies: there is a reduction in the number of births and an increase in life expectancy, in the long term.
According to the figures presented by the INE, the number of births has been in permanent decline for many years, but with an especially sharp drop since 2015. Until that year, the number of annual births was around 47,000, but as of That year a continuous decline began, reaching 32,301 last year. This figure is lower than the number of deaths, which increased due to the pandemic, but which, even if it decreases in the coming years, would continue to be higher than births. And here the mathematics is quite simple: if this scenario is not changed, the population of the Uruguay will begin to descend.
The immigration of recent years (just over 61,000 people, mainly Venezuelans and Argentines) certainly attenuates the trend, but does not change it: those immigrants are included in the count, and even so the population was substantially lower than projected (specifically , 3.4% lower).
At the same time, the structure of the population is changing noticeably, with an increase in the average age. Taking the strata provided by the INE, in 2023 and for the first time in history, people aged 35 or over will exceed 50% of the total. Specifically, in 2023, 38% of the population was between 34 and 64 years old and 16% were 65 years old or older. Advances in medicine, quality of life and technology in general allow an increase in life expectancy that is reflected in the demographic structure, something that is also seen in countries that improve their economic development.
However, Uruguay It has not yet reached the status of a developed nation and has certain vulnerabilities from an economic point of view, which make the aforementioned demographic trends a true yellow light in the projections of growth, development and quality of life of Uruguayans.
In fact, one of the main impacts in the change of the demographic pyramid (with less base and more height) occurs at the level of the health systems. social Security. These systems, historically based on an intergenerational distribution scheme, in which new workers finance the retirement of those who are retiring, have run into serious problems, because the former are becoming less and less and the latter are increasingly more.
Uruguay — wisely — has sought to anticipate the problem with the recent reform of the social Security, which increased the minimum retirement age and also unifies the systems in the medium and long term. The reform also establishes the individual savings pillar as mandatory, in order to give more financial sustainability to the system. The problem is that, although it is now mandatory for all workers, the individual savings pillar has become smaller, going from 7.5% to 5% of the salary (in the most common case). The change was the result of the political discussion that the Executive’s original project had, but, given the new census data, it can be argued with good reasons that changes should be introduced to the system sooner than thought. Increasing the weighting of individual savings would be an advance for the sustainability of the system and would be fair to the youngest.
Birth rate, voluntarism and reality
The drop in the birth rate gives rise to various comments and even proposals to increase it, that is, to encourage younger people to have more children. A voluntaristic reflex that rarely—never?—has results.
The issue deserves a broader approach regarding its causes. Firstly, it seems quite clear that to the extent that throughout the 20th century and so far in the 21st century, women have been entering the formal labor market, the constitution of the family and decisions about gestation and raising children have had an impact. profound change, with fewer births and an older age at the birth of the first child. Surely changes also affect the aspirations and projects of the new generations.
But there are also factors that can change depending on the country. The same day that the INE released the data of the 2023 Censusalso published its monthly report on employment differential, where it analyzes labor market data by age group. There it is confirmed (because the data is not new) that the most complicated problems of employment They occur in young people from 25 to 29 years old, and, to a lesser extent, from 29 to 34 (the strata are established by the INE itself). In the case of young people under 24 years of age, the activity rate there is much lower and whether or not they enter the labor market depends on the individual’s training and education plans, among other issues.
But from the age of 25 onwards the person is of working age and, however, the unemployment It is more than 12%, more than double that of adults (graph). Entry and development in the labor market is random for most young people, regardless of the level of education. And it may become increasingly challenging with the acceleration of the information technology revolution, which makes it difficult to plan a career even in the medium term.
This imposes a double challenge on education: to give clearer signals of the future trend and adopt its offer to that, while maintaining and increasing the educational quality of the young generations, who are going to have a greater economic weight on their shoulders. . Almost nothing.
At the same time, a greater degree of openness and flexibility is needed in the labor market, especially for new workers. The youth employment law, well-intentioned, has had little impact. But this greater openness and flexibility is not always welcomed by unions; To a certain extent, that is understandable, but possibly the measures and protections for employed workers (a historical hallmark of Uruguayan society) have a cost that is being paid by the youngest; and just when the eventual constitution of a family and a life project are defined. The birth rate will hardly return to those of the past, but without taking these issues into account, they may continue to drop surprisingly in Uruguay.