Demographics of Brazil

Posted by on Jan 10, 2012 in Meeting Brazil | 0 comments

This is a guest post by Elaine Hirsch. Her interests range from education to technology to public policy. She is currently working as a writer for various education-related sites.

As part of the BRIC countries, Brazil was one of the countries which was designated as a developing country becoming a major global power in the 21st century. With a rich stock of commodities and oil along with a growing shift towards urbanization, Brazil was a perfect example of a country rapidly shifting through the stages of the demographic transition.

The demographic transition model which was pioneered by Warren Thompson in 1929 and taught in bachelor’s and master’s degree programs for development economics focuses on four main stages of population growth:

  • Birth rates are low and death rates are high, so overall population growth is stagnant.
  • Birth rates increase due to improved agricultural practices, while death rates decrease due to better public health education, so overall population growth accelerates.
  • As people realize that their quality of lives have improved and they no longer need to have numerous children to keep up with high death rates, they begin having less children. Birth rates decrease and death rates remain low, so overall population grows, but decelerates.
  • Finally, both birth rates and death rates remain low, and population growth goes back to zero.
  • Some economists have argued that a fifth stage, where population growth is negative because replacement rate is lower than 2.1 children per women occurs, and we are beginning to see signs of this.

In 1964, Brazil’s fertility rate was 6.2 children/woman. This figure represented Brazil at the peak of the low death-rate/high birth-rate stage. This was a result of Kubitscheck becoming president in 1956 and his efforts in developing the nation’s automobile, energy, and transportation industries. Furthermore, he used his political ability to bring democracy to Brazil, facilitating the groundwork for a stable administration.

As the effects of Kubitscheck’s efforts caught on, Brazil transitioned to the third stage of the demographic transition. In 1996, the replacement rate dropped to 2.5, barely above the rate required to sustain population growth.

Today, the replacement level is only 1.8, which means that Brazil’s population will be diminishing in the next few decades. A family’s story covered by PBS exemplifies the exceptional rate of population growth in the country; a interviewed mother had six children and only stopped due to the physical stress associated with giving birth. In contrast, each of her six children have a total of just seven offspring among them, marking the stark shift one generation makes in Brazil.

Although conventional wisdom would suggest higher standards of living would translate to higher birth rates, this classic assumption fails to consider the opportunity costs of bearing children. As populations (especially women) gain wealth and social status, the opportunity cost of carrying, giving birth to, and raising children increases drastically. In Brazil today, women have access to birth control (80% of women of child-bearing age use contraception), opportunities resulting from college education (40% of the country’s work force consists of women), and an overall healthier job market as a result of the country’s booming economy.

More Than Just Numbers

Brazil’s eroding replacement rate marks one of the quickest declines in the world, and this swift change has many implications in terms of future economic and social growth in the country.

Demographics is more than just a numbers game. Although Brazil’s population is technically on the decline with a replacement rate of just 1.8, The country’s medium-term outlook remains rosy. As mentioned earlier, Brazil’s population blossomed during the mid-late 20th century. This results in a large proportion of Brazil’s population today reaching or at working age, increasing the overall productivity of the country (this is known as the demographic dividend). As you can see from the image below (found from the U.S. Census Bureau), Brazil will have a blossoming working class to support a very small retired population:

Brazil Population Pyramid

Unlike the United States, where politicians are arguing over whether social safety nets such as Social Security, Medicare, and Medicaid are necessary expenses, Brazil has the luxury of not worrying about such issues for decades to come.

Several statistics also support the improved productivity that Brazil’s demographic dividend has provided. Despite a stagnant global economy, Brazil’s economy is forecast to grow by 3.6% this year. Furthermore, GDP per person will overtake Britain to become the sixth largest economy in the world. As you can see below (from Euromonitor International), the number of middle class families in Brazil has increased across the board:

Brazil - disposable income

Sustained growth in the middle classes is a positive sign for economic growth. It signals that people previously living in the poorest areas have had increased employment opportunities and access to credit, but it also brings in a higher population base to base the demographic transition on. As mentioned earlier, Brazil’s replacement rate is currently 1.8, well below the number needed to sustain a population, and one of the biggest reasons has been the shift of the lower classes into middle classes over time.

If the current trends in Brazil seem too-good-to-be-real, it technically is. Although Brazil’s economy will surely be driven by its young workforce today, old age will catch up to this blossoming demographic in a few decades. As Brazil’s population becomes increasingly populated with retired people, the dearth of young, working-age individuals will somehow have to support the massive social security payouts of an old population.

Of course, it’s hard to say exactly what will happen a few decades from now. No country in the history of the world has gone through every state of the demographic transition. Although Japan is the furthest along, it has yet to be seen how countries in Japan’s respective stage will respond to such a negative disproportion of non-working citizens. In terms of Brazil, the best thing the country and its citizens can do now is to make the most of their demographic dividends. Creating opportunities for the ambitious working class to find jobs and innovate so they can find a way to support themselves after retirement.

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