Demographic Dividends and Economic Growth in Latin America

Abstract

The objective of this paper is to analyze the possibility of a low and middle-income trap for the Latin American countries due to demographic changes. Based on the use of a panel data from 16 countries during the period from 1970 to 2014, it is identified that the growth of GDP per capita is related with the first demographic dividend. However, given the dynamics of the fertility rate, we identify a latent risk of low and middle-income trap equilibrium in the long term unless there is an increase in the saving rate, investment and, therefore, the long-term productivity.