Uruguay’s population has stagnated. Fewer and fewer children are being born in a country with one of the lowest birth rates in Latin America. This demographic trend will have an impact on the labor market, according to a study carried out by the Uruguayan consulting firm Exante.
“Uruguay is a country of 3.5 million inhabitants. It has a demographic that is quite similar to that of European countries, in the sense that it has historically had much lower birth rates than those observed in Latin America,” explains Pablo Roselli, one of the economists who produced the report.
“The country’s total population reached a peak in 2020 and Since then it has shown a slightly declining trend.; The working-age population is also going to start to decrease,” he adds.
This poses a series of challenges for public authorities, since the labor market will be made up of increasingly older workers and there will be fewer and fewer young people. In addition, there is also a lack of immigrant labor.
“Uruguay historically was a country with a negative migratory balance. Currently we have a practically zero migratory balance. Uruguay attracts immigrants. In the last 10 years, some 65,000 immigrants came, from Venezuela, Cuba and Argentina, but there are also Uruguayans who go abroad. Certainly, Uruguay must try to change the sign of the migratory balance, which is slightly negative currently and should try to attract qualified talent,” he says.
The aging of the population will also bring important changes in consumption, as Pablo Rosselli explains. “Logically, as the country continues to grow, consumption will increase in all sectors of the economy, but in terms of composition or biases of consumption decisions, as the population ages, logically the most obvious thing is that increase demand for health services and the demand for education services is reduced,” he points out.
“That is trivial, but it is also true that the demands for healthy eating, services and products for the home increase, for example. People, as they age, leave their homes less, but they demand more comfort within the home and these are trends that we are surely going to observe in Uruguay as is so observed in developed countries, where this demographic transition is quite advanced,” he explains.
Uruguay is one of the countries with the highest structural unemployment rate, 7%. Today, Those over 50 already represent just over a quarter of hours worked in the economy.