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Charles Sizemore
Charles Sizemore
Articles (507)  | Author's Website |

Latin American Birthrates Falling Off a Cliff

If family sizes continue to shrink, Latin America is going to eventually have the same problems facing Japan and much of Europe

August 11, 2017 | About:

Here’s a fun fact that will probably blow your mind: The average Brazilian, Colombian and Mexican woman will have 1.8, 1.9 and 2.2 children, respectively, over the course of her life. That’s no higher than the average American woman, who has 1.8 children over the course of her life, and — in the case of Brazil and Colombia — actually below the replacement rate.

The stereotype of the large, Catholic, Latino family simply no longer holds true. The most fertile country in the region is Guatemala… and even there, the number is only 3.2 children per woman.

There are plenty of theories as to what led to the birth dearth: more liberal social views, declining influence of the Church, better educational and career opportunities for women, etc., and all are no doubt contributing factors. But I have my own theory here. It’s all about money.

I spend a lot of time in Peru (it comes with the turf when you marry a Peruvian woman), and I’ve noticed the trend towards smaller families here as well. You can explain some of the trend in smaller families to women getting married later (my wife’s high school friends are all around 35 years old, and the majority are still unmarried). But even this can be partly explained by money. It’s so expensive to live in Lima, Peru, most couples can’t realistically afford to get married and start their own household until they’re pushing middle age.

Wages are rising in Peru (and the rest of Latin America), but the cost of living — and specifically housing — is rising a lot faster. If you want your child to be employable, you also have to pay for private education in Peru, which can easily top $1,000 per month per child for even a mid-tier school. Most American or European families would struggle with paying an extra $2,000 to $3,000 per month in school fees, so imagine how much worse it is on a local salary.

I’d liken it to American trying to afford a large family in Manhattan or San Francisco. It’s just not realistic for the vast majority of people.

Smaller families aren’t a problem… yet. Though if family sizes continue to shrink, Latin America is going to eventually have the same problems facing Japan and much of Europe: aging populations and stagnating economic growth.

Disclaimer: This material is provided for informational purposes only, as of the date hereof, and is subject to change without notice. This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities nor is it intended to be investment advice. You should speak to a financial advisor before attempting to implement any of the strategies discussed in this material. There is risk in any investment in traded securities, and all investment strategies discussed in this material have the possibility of loss. Past performance is no guarantee of future results. The author of the material or a related party will often have an interest in the securities discussed. Please see Full Disclaimer for a full disclaimer.

About the author:

Charles Sizemore
Charles Lewis Sizemore, CFA is the chief investment officer of Sizemore Capital Management. Please contact our offices today for a portfolio consultation.

Mr. Sizemore has been a repeat guest on Fox Business News, quoted in Barron’s Magazine and the Wall Street Journal, and published in many respected financial websites, including MarketWatch, TheStreet.com, InvestorPlace, MSN Money, Seeking Alpha, Stocks, Futures and Options Magazine, and The Daily Reckoning.

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