Macroeconomic Effects of the Demographic Transition in Brazil

Abstract

Brazil is a relatively young, prominent developing country undergoing what is expected to be a fast demographic transition. Owing to a decline in the mortality rate, the Brazilian population increased significantly between 1940 and 1970. In the 1940s, the annual population growth rate was around 2.4 percent, rising to 3.0 percent in the 1950–60s, as life expectancy rose from 44 to 54 years. According to Carvalho (2004), the so-called demographic transition in Brazil started in the 1970s, with a sudden fall in the fertility rate. The latter kept decreasing since then, leading to important differences between the actual age distribution of the population and its so-called stable-equivalent.¹ At the same time, longevity kept increasing. By 2010, population growth had fallen to only 1.0 percent per year, life expectancy had reached 74 years, and the economically active population had grown from 56 percent to 64 percent of the total population (between 1980 and 2010).