1 Introduction

This chapter reviews the most important demographic issues in Latin America generally, with a focus on Argentina and Brazil, and how these issues interact with economic, political and social trends. The first section introduces the reader to major demographic trends of population ageing, migration and ethnicity, and urbanization. The following sections discuss each of these trends in greater detail, linking them to the region’s pervasive problem of inequality. Last, the chapter discusses how the salient demographic challenge of population ageing may exacerbate inequality, populism and macroeconomic crises.

With a current population of 44 million, Argentina is the third most populous country in South America, surpassed only by Colombia and Brazil (Fig. 1). It ranks 31st in world population and its population has been growing at a rate of 1.09% since the 1990s, very close to the median across countries worldwide (1.32%). Argentina is expected to keep growing at a declining rate and to reach a population of 52.6 million by 2040. With a population of 210.8 million in 2018, Brazil has the world’s fifth largest population. The country grew at an annual average of 1.27% between 1990 and 2016 and is expected to reach a population of 231.6 million by 2040 (UN, 2017). The change in shape of the population pyramid depicted in Fig. 1 depicts the rapid ageing process both countries are facing. The median age in Argentina is expected to increase by nine years between 1990 and 2040. The case is more acute in Brazil, where the expected age increase is almost 20 years. This steep increase in median age is a shared problem across Latin America, which will be the world region with the fastest increase in the old-age dependency ratio in the next decades (UN, 2017).

Fig. 1
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(Note Males are to the left [black], females to the right [grey], Median age [MA], ageing stage [AS]. Source Computations by Richard Cincotta)

Population pyramids in Argentina and Brazil

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Table 1 Main demographic indicators for Argentina and Brazil in 2015
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In stark contrast to their histories, neither Argentina nor Brazil have experienced important international migratory flows in recent decades. In 2015, net migration was less than 0.1% of the total population in both countries (Table 1). Moreover, the countries of origin of migrants have shifted. Whereas they previously migrated from overseas, they now migrate from neighbouring countries. The following section will delve deeper into the important connection between migration and ethnic composition of the two countries.

South America is the world’s most urbanized region (when including Central America, Latin America is second only to North America). Argentina and Brazil surpass regional averages, with over 90 and 85% of their population residing in towns and cities, respectively. This high level of urbanization occurred in the twentieth century, within the span of two generations. Influencing factors included a push away from rural areas due to the introduction of capitalist modes of production, and a pulling towards industrial clustering in cities, which offered significant labour opportunities.

2 Migration and Ethnicity

2.1 Migration

Migration has shaped the history of Argentina. First inhabited by indigenous populations, the area now known as the Argentine Republic was a Spanish colony between 1580 and 1810. Great waves of immigrants, mainly European males from Italy and Spain (but also other European, Asian and Jewish minorities), arrived between the mid-nineteenth century and the mid-twentieth century. In the first decade of the twentieth century, Argentina had the highest immigration to population ratio in the world (Glaeser et al., 2018). Immigrants mixed with the relatively smaller local indigenous population, an African base that had been brought during the Spanish conquest and the Spanish colonists. Brazil has had similar migration flows. Before the sixteenth century, it was home to native tribal societies. As a Portuguese colony between 1500 and 1815, the country experienced mainly Portuguese immigration, followed by an influx of Africans brought as slaves primordially from the African west coast. From 1884 until the decade preceding the Second World War, 4.2 million people migrated to Brazil from Western and Southern Europe, Japan, Syria and Turkey (IBGE, 2000).

Despite their history of immigration, Argentina and Brazil have not experienced substantial migratory flows in recent decades. In 2015, net migration was less than 0.1% of the total population in both countries, and their stock of migrants (those already in the countries) was very close to the world average (UN, 2017). Additionally, as shown in Fig. 2, the immigratory flow today comes mostly from other Latin American countries. Immigrants from Paraguay, Bolivia, Peru and Colombia made up about 75% of the migratory flow to Argentina in 2015. Brazil shows a very similar composition, except that it also received a high number of immigrants from Haiti.Footnote 1 Notably, there is discrimination against immigrants from some of Argentina’s neighbouring countries, likely because they are often associated with specific social classes .Footnote 2 Hence, migration might already be indirectly addressed in the political agenda through the lens of social class and inequality, an important topic which we will expand on in the following section (Grimson, 2006; Pascucci, 2010).

Fig. 2
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(Note South American countries in Blue. Please note the different scales of the Y axis. Source Direccion Nacional de Migraciones [2018] and Policia Federal do Brasil [2017])

Immigration to Argentina and Brazil in 2015, top origin countries. In thousands

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Perhaps due to the relatively small number of immigrants in the last decades, immigration is neither an important issue of political debate nor an established topic in the agenda of major political parties in either country. One contemporary exception is the recent increase in Venezuelan migrants fleeing the political and economic crisis in their country. The United Nations Human Rights Council estimates that more than 4 million Venezuelans left their country between 2015 and 2019, with almost 208,000 and 150,000 migrating to Argentina and Brazil, respectively (UNHRC, 2020).Footnote 3 Given its size and speed, it is one of the largest migratory events of recent decades in the region. The influx to Brazil and Argentina has increased more than 10-fold and almost 4.5 times between 2015 and 2017, respectively (Mely Reyes, 2018). Up to the time of this manuscript (August 2020), most countries in the region, including Brazil and Argentina, have welcomed Venezuelan migrants. However, as the exodus accelerates, many question whether or not the region will maintain its open-door policy. For example, Chile and Colombia have already tightened their documentation requirements for Venezuelan immigrants (Charles & Wyss, 2018).

Argentina’s two largest political parties, Frente de Todos and Juntos por el Cambio, have expressed an open arms attitude towards Venezuelan migrants, and even though the above paragraphs highlight discrimination against migrants in Argentina, there are two reasons that explain this apparent contradiction. First, Venezuelan migrants in Argentina are younger and better educated than their counterparts from other countries in the region (Himitan, 2017). This is particularly important in the context of population ageing that we address in the next sections. Second, although Juntos por el Cambio is usually associated with the right side of the political spectrum (possibly due to a cohort effect, see Goerres, 2008), the party has been an outspoken critic of the Venezuelan regime. This has been partly in an effort to differentiate itself from its predecessor, main political adversary and long-time supporter of the late Hugo Chávez of Venezuela, Cristina Fernandez de Kirchner.

Even though Argentina has approved more residence requests, the conditions have generated more friction in Brazil. Roraima, which borders Venezuela and is one of Brazil’s poorest states, has received the highest concentration of migrants. In 2018, local populations in Roraima claimed an increase in crime rate linked to the arrival of Venezuelan migrants and their grievances escalated into violent demonstrations. The government declared a state of emergency and mobilized military troops with the aim of assuring the safety of both Brazilians and Venezuelans. However, according to the President, “the problem of Venezuela is no longer one of internal politics. It is a threat to the harmony of the whole continent” (BBC, 2018). Moreover, Brazil’s economy has been unable to accommodate the number of Venezuelans that arrive. The government has been unable to provide the basic services of health, security and housing, or even to coordinate the distribution of Venezuelan migrants across Brazil. Hence, half of the Venezuelan migrants that came to Brazil between 2017 and 2018 returned to Venezuela (Polícia Federal do Brasil, 2018).

2.2 Ethnicity

The large flows of migrants who have arrived in Argentina and Brazil played an important role in shaping the ethnic and religious composition of both countries.Footnote 4 In Argentina, the mixture of indigenous populations, European immigrants, African slaves and other minorities created a blend denominated crisol de razas (equivalent to the term “melting pot” used in the United States) in the national culture. European immigration greatly surpassed other flows, thus Argentina has been labelled a “transplanted population”, a term used to describe countries where “transplanted” migrant vastly displaced the indigenous inhabitants (Ribeiro, 1985). During the late nineteenth and early twentieth centuries, many countries in Latin America wrote immigration and citizenship laws that reflected European preference. At the same time, Argentina was one of the most attractive destinations for European immigrants due to a confluence of political and economic factors that include the conquest of new territories, rapid economic growth and improved trade and transportation technologies (e.g. port infrastructure) (Cook-Martín et al., 2015).

As a result, the prevalent discourse usually favours the country’s European heritage, overlooking the importance of other ethnic influences in the Argentine crisol de razas (Hopenhayn, 2001; Izquierdo Iranzo et al., 2016). This helps explain the primordial dilemma related to ethnicity in Argentina: a denial of diversity. Immigrants from adjacent countries and working populations with indigenous ancestry are stigmatized and merged into one perceived social class that is minimized in the mainstream national identity and Argentina’s popular discourse (Grimson, 2006; INADI, 2005).

Like Argentina, Brazil’s population is the result of a mixture between indigenous populations and descendants from Europe, Africa, Asia and the Middle East. However, its population is comparatively more intermixed and the national discourse is relatively more balanced (Dos Santos & Anya, 2006). Still, non-Europeans are underrepresented in positions of power. For instance, although 44.2% of the population was European-descendent as of 2016, they made up 75% of the congress in 2018 (Câmara dos Deputados do Brasil, 2018; PNUD, 2018).

3 Urbanization and Class Division

3.1 Urbanization

With about 80% of its population residing in towns and cities, Latin America is the developing world’s most urbanized region. Furthermore, urbanization is expected to rise to almost 85% by 2030 (UN-Habitat, 2018). Argentina and Brazil exemplify the regional trend. As shown in Fig. 3, 92% and 86% of their populations reside in urban areas, respectively (UN-Habitat, 2018).

Fig. 3
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(Note High Income Countries [HIC], Medium Income Countries [MIC], Low Income Countries [LIC], Latin America and the Caribbean [LAC]. Source UN [2017])

Share of total population residing in urban areas

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The current rural-urban distribution is a consequence of economic developments of the twentieth century. In the 1930s, a significant increase in labour opportunities in cities generated by industrial clustering, and the introduction of capitalist modes of production in rural areas, fuelled massive rural-urban migration. Both “pull” factors spurred the transition from a rural to a highly urban society within only two generations.Footnote 5,Footnote 6 Despite being usually associated with rural areas, the region’s indigenous population has also been affected by “pull” factors towards towns and cities, and experiences additional “push” factors. For example, while indigenous populations tend to be disproportionately excluded from basic services like electricity, sewage and piped water in both settings, the gap is higher in rural areas (World Bank, 2015). As a result, in Latin America as a whole, indigenous populations are almost equally likely to live in rural as in urban areas.

On the high end of the spectrum, 82% of Argentina’s indigenous population reside in urban areas, the highest in the region (World Bank, 2017). And, while indigenous urbanization tends to correlate with overall urbanization in the region, only 39% of indigenous populations reside in cities in Brazil. For comparison, Chile and Venezuela have similar levels of general urbanization to Brazil (about 85%) but have a higher level of indigenous urbanization (about 65%) (World Bank, 2015).

3.2 Socially Fractured Cities

A look at the history of urbanization in Latin America reveals a fractured society. The massive and rapid migration to urban centres created peripheral settlements rife with unemployment, poverty, inadequate infrastructure and crime. This affected the structural development of the city that further entrenched urban segregation. On the one side, there were developed neighbourhoods with densely-packed houses in precarious condition (so-called slums, shantytowns and squatter settlements).Footnote 7 On the other side, there was a proliferation of “fortified enclaves”, privatized, enclosed and monitored spaces of residence, consumption, leisure and work, aimed at keeping its residents and their property safe from the outside world. This set-up affected not only the spatial distribution of cities, but also the dynamics between social groups. The physical division of inhabitants disrupted community cohesion, and slums were increasingly regarded as formations apart from cities itself. Urban development initiatives often failed to consider marginalized areas and peoples, furthering segregation and amplifying class conflict (Hernández et al., 2010; Rodgers & Beall, 2011). Indigenous populations suffered disproportionately from these disadvantages because they were overrepresented in slums (World Bank, 2015).

Post military regimes of the 1950s–1980s, a wave of democratization transformed the status quo in Latin America (Hagopian & Mainwaring, 2005). During this period of increased affirmation of political rights, the perception of slums mutated from unintended and politically irrelevant consequences of development to untapped sources of political activity. Together with the flourishing of social movements of the time, this transformation was crucial for the advancement of otherwise marginalized groups, allowing them to gain the necessary clout to push their interests into the political decision-making process (Rodgers & Beall, 2011).Footnote 8 While it undisputedly improved the political participation of marginalized groups, the new reality did not solve segregation in cities or the related problem of inequality.

3.3 Inequality

Fractured cities exemplify a pervasive problem of inequality. Research over the past decades has shown that inequality should be a matter of concern for political and economic reasons. It can decrease social cohesion and generate mistrust in the government, decimating public institutions. It can also weaken the pace of the accumulation of physical and human capital and affect productivity growth, which are sources of economic growth (IADB, 1999; Peterson, 2017). Sadly, Argentina and Brazil, as many other countries in Latin America, are quintessential case studies of these relationships. Despite recent improvements over the past 15 years, Latin America is arguably the most unequal region in the world (Lustig, 2015; Robinson, 2010). While the world average Gini Index between 2000 and 2016 was 38.9, the indicator was 46.1 and 54.7 in Argentina and Brazil, respectively. Following world trends, inequality measured by the Gini coefficient is even higher when measured through land ownership (Fig. 4).

Fig. 4
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(Source OXFAM [2016], World Bank [2018], and GRAIN [2014])

Wealth and land distribution in Latin America

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In the region, the largest one percent of farms concentrate more than half of agricultural land. In other words, that one percent holds more land than the remaining 99%. In South America, the Gini coefficient of land ownership is even higher than in Latin American as a whole, reaching 0.85 (FAO, 2017). Argentina and Brazil are no exceptions to regional trends; their land Gini coefficients are 0.83 and 0.87, respectively (FAO, 2017).Footnote 9 If, on top of quantity, the distribution could somehow measure quality (e.g. incorporating measures of soil quality, proximity to markets, availability of water, etc.), inequality would be even higher (OXFAM, 2016). In the next sections, we shall see how high inequality in Argentina and Brazil feeds class conflict, affects the political rhetoric and influences economic policy in political cycles originally described by Sachs (1989).

4 Population Ageing

Pension systems and conditional (non-contributory) cash transfer schemes are responsible for a great share of Latin America’s reduction in inequality over the last two decades (Lustig, 2015; Rossignolo, 2016; Veras Soares et al., 2010). However, population ageing may jeopardize the sustainability of these programmes. Due in large extent to a high level of spending in Brazil’s pension scheme, as well as a high coverage of formal sector workers by contributory pensions, public spending by age group shows a clear bias towards the elderly. A representative measure is the ratio of elderly poverty to overall poverty in Brazil, which is the lowest in Latin America (OECD/IDB/The World Bank, 2014).Footnote 10 In Argentina, the results are not as extreme, but social transfers are also biased towards the elderly (Gragnolati et al., 2015).

In addition to their substantial retirement schemes, both countries have sizable non-contributory conditional cash transfer programmes that target poor families with children. The programmes are aimed at reducing poverty and are contingent on the provision of education and on the health of children. In Argentina, the Asignación Universal por Hijo (Universal Child Allocation) was created in 2009. By January 2018, the programme had 3.9 million beneficiaries and accounted for 1.3% of government spending. In Brazil, similar initiatives started in 2001 and were expanded and centralized in 2003 under the name of Bolsa Família (Family Grant). Today, it benefits 14 million households.Footnote 11 In 2018, the programme remains active and was described by Veras Soares et al. (2010) as the largest conditional cash transfer programme in the world.

As previously discussed, Argentina and Brazil’s demographic transition is underway and will accelerate in the next decades. Specifically, between 1950 and 2015, life expectancy increased from 63 to 76 in Argentina, and from 51 to 75 in Brazil. During the same period, fertility decreased from 3 to 2 children per woman in Argentina and from 6 to 2 in Brazil (UN, 2017). Consequently, there has been an increase in the ratio of those in retirement age to those in working age, or the old-age dependency ratio (Fig. 5). However, between 2015 and 2050, the indicator is expected to increase at a faster pace—from 19.5–30 in Argentina, and 13–40 in Brazil (UN, 2017).

Fig. 5
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(Source UN [2017])

Old-age dependency ratio

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Based on the population dynamics described above, the International Monetary Fund (IMF) estimates an increase in social spending of 140% in Argentina and of 190% in Brazil (IMF, 2017, 2018a, b; Wachs et al., 2017). The IMF projections depict unsustainable scenarios, and the system would implode before reaching such levels. The correlation between dependency and social spending has been debated in many studies. For example, Sanderson and Scherbov (2015) argue that the indicator omits the effects of changes in labour force participation, which may offset the impact of population ageing. Nevertheless, there is no reason to believe that labour force participation rates will increase significantly soon. It has been decreasing in both Argentina and Brazil since the mid-2000s, and the levels are close to, or higher, than those of comparable countries (World Bank, 2017). Some studies have suggested that closing the gap between male and female labour force participation could help offset the impact of decreasing population growth rates (Adamchak & Friedman, 1983; Bloom et al., 2011). Female participation in the labour force in Argentina and Brazil increased significantly in the 1990s and today is around two-thirds of male participation. However, the increases of the past decades have not continued since the turn of the century (World Bank, 2017). Moreover, population ageing does not only decrease the share of the population in the working age. In fact, it may also discourage labour participation of individuals of working age through an increase in inter-generational dependency in the household, where unpaid labour tends to fall disproportionately on women (Bussolo et al., 2015; Gál et al., 2018). Additional work is needed to understand how the interactions of female workforce participation, population ageing and long-term care will play out in Latin America.

As shown in Fig. 5, there is a window of opportunity before the demographic transition accelerates. However, addressing social spending in Latin America is complex. Due to the high inequality in the region, social spending is the main cause of recurrent social conflict, ahead of issues like ethnicity, religion and immigration. This societal backdrop also helps explain the populist rhetoric that makes part of pervasive political and macroeconomic cycles. The connection between inequality, populism and macroeconomic crises has been well documented, starting with Sachs (1989) and Dornbusch and Edwards (1991). These studies argue that persistent poverty and inequality in Latin America influences the political agenda by creating intense political pressure on macroeconomic policies, often tasked to raise the income of lower income groups. In many cases, this pressure contributes to poor policy choices and consequently, weak economic performance (Birdsall et al., 2011; Dornbusch & Edwards 1991; Glaeser et al., 2018; IADB 1999; OXFAM, 2016; Sachs 1989).Footnote 12

Governments that are, genuinely or otherwise, concerned about inequality have tended to initiate myopic and overly expansionary macroeconomic policies. While these policies may increase wages and boost the economy in the short run, they eventually lead to high inflation and severe balance of payments crises that culminate in economic crises. Ultimately, the cycle exacerbates poverty and sluggish development (Dornbusch & Edwards, 1991; Sachs, 1989). The same dynamics were present in the recent economic and political cycles of Argentina and Brazil. In fact, recent protests against social spending reforms in both countries limited the capacity of the government to legislate (Cohen & Misculin, 2017; Marcello & Marcelino, 2017). Even though the protests were grounded in real necessities of poverty alleviation, the current welfare systems of both countries are unsustainable under the expected demographic trends (IMF, 2017, 2018; Wachs et al., 2017).

The context of population ageing, unsustainable welfare and social unrest depicts the two sides of social conflict (for a broader discussion see Goerres & Vanhuysse, 2012). On the one hand, it is an expression of needs for tangible improvements in life quality, issues that must be addressed (UNDP, 2013). On the other hand, under certain conditions, social conflict can polarize the political debate and obstruct policy development, as has been the case with social spending. If political parties and the population in Argentina and Brazil are unable to reach an agreement that puts social spending in a sustainable path, demographic change will likely intensify the conflict over resources.

5 Conclusion

Argentina and Brazil have transitioned in the last century from rapidly growing centres of international immigration to having relatively stable populations. Perhaps due to the small number of immigrants in the last decades, migration is neither an important issue of political debate nor an established topic in the political agenda of both countries. Nevertheless, this has been recently interrupted by the current Venezuelan political and economic crisis, which triggered the most important surge of migration in the region of the last decades. The structural development of cities and the distribution of land ownership in Argentina and Brazil attest to the region’s inequality, a topic that permeates most economic and political disputes. While the democratization of the 1980s increased political representation of marginalized groups, Latin American cities are still socially and structurally fractured and inequality in the region also remains high. Social spending has been a major contributor against poverty and inequality in the last decades. However, like most countries in Latin America, Argentina and Brazil are transitioning into having older populations, a demographic process that tends to increase the share of the population entitled to pension and healthcare benefits, while reducing the share of contributors (Tepe & Vanhuysse, 2009; Vanhuysse & Goerres, 2012; this volume). Without reforms, the situation will make healthcare, pension and other social benefits financially unsustainable. Yet, due in part to inequality, Argentina and Brazil have repeatedly shown an inability to successfully reform their welfare system. Without the social cohesion necessary to generate the appropriate policies addressing this issue, the countries will face new crises, undermining gains in poverty and inequality over the last decades. Argentina and Brazil, like other countries in the region, are quintessential case studies of the relationship between inequality and social conflict. Incorporating this dynamic is fundamental to understanding the political, economic and societal implications of the region’s most pressing demographic issues.