Peru's Unsustainable Retiree Burden on its Shrinking Workforce


 
Peru’s fertility rate has been broadly declining since the 1990s and is now sub-replacement. Retirees are living longer and forming an ever-larger part of the population. Simultaneously, the working-age population will start to shrink by the end of this decade. These factors are causing an extraordinary decline in the number of working-age people available to support the expanding number of retirees.

Number of Working-Age People to each Dependent (65+) in Peru
The working-age population represents those aged 15 to 64. Period: 1990-2050.
Peru



Note: Y axis ratios are expressed as “X : 1,” meaning X working people to every 1 elderly dependent.

In 1950, each Peruvian retiree was supported by nearly 16 people of working age. By 2050, this is projected to be closer to 4. Once enjoying a far higher worker-to-retiree ratio than the OECD average, Peru is approaching the same dire ratio by 2050 (the OECD average by that point is estimated to be just above 2). Adding to this already nightmarish equation is the fact that Peru has a 72.7% labour participation rate. Therefore, these figures overstate the number of workers available to support retirees today. The particular issue for Peru is that, with this demographic shift, it may become old before it can become rich. Peru will struggle to achieve the high GDP-per-capita levels that match the developed West due to its falling worker-to-retiree ratio, stymying any ambitions for developed nation status.

More for subscribers:  
See more...The Alarming Cost of Aging Demographics
See more...See more data for Peru...
See more...See more Fertility Rate data...
See more...See more 'Number of Workers to Each Elderly Dependent' data...



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