Aging, education and some other implications for the silver dividend in developing countries: Evidence from Brazil

Abstract

Population aging increases dependency levels and can influence the transition from working life to retirement. Changes in population structure have important economic effects, which can be positive when analyzing the impacts of a more educated older labor force but could also impact families and governments. It is important to consider how age and education composition are associated with each other in contexts marked by high levels of inequality. In this paper, we analyze the economic consequences of the aging process in Brazil considering the role of improvements in education and the possibility of the constitution of a silver dividend in the country. We use a series of simulation models, based on the determinants of labor supply and labor income of people aged 45 years and over, to investigate the impacts of changes in the educational composition of the labor force. Our simulations show that the positive association between education, labor supply, and labor income would be more pronounced in scenarios of higher levels of education, labor market stability (high status activities and informality reduction), and changes in retirement rules, specifically the establishment of minimum ages. Such a context would increase the number of older workers and improve productivity, allowing appropriate conditions for the development of a silver dividend in Brazil in a quantitative and a qualitative way.