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In the 1950s, the Italian-American economist Franco Modigliani introduced his "life cycle" hypothesis.Children and youth on one end, and older adults on the other, consume more than they earn. Sandwiched between both is a working-age group, which does have the capacity for savings (voluntarily or through taxation) to cover, in addition to the needs of their dependent children: their future consumption via pension systems with individual retirement accounts; or consumption by the elderly in the case of pay-as-you go pension systems.
Data from five Latin American countries show that an average individual will be in the “sandwich generation” for half of their life. People in Ecuador, Honduras, Mexico, Nicaragua or Peru begin to earn more than their private consumption at age 24 and go into deficit again at age 63, which lasts for the rest of their lifetime (approximately 73 years of age in the region).
Although professor Modigliani may not have thought about it at the time, this theory would end up being applied to the population group that has small children or children who continue to depend on them as well as aging parents needing assistance.
Need for public policies
People in their forties and fifties in the region are beginning to see themselves not only as the “generation in the middle” but also as individuals squeezed between financial and care responsibilities for both children and parents. Women especially are responsible for assuming the caretaking needs of multiple generations as they are usually the ones who care for both parents (and/or in-laws) and children or grandchildren.
The “sandwich generation” is not a new development: historically, adult children contributed to the livelihood and care of elderly parents, often in homes where the extended family lived. Nevertheless, several aspects of the demographic trends in our countries are making it imperative for public policies to address this phenomenon.
The significant increases in life expectancy and the reduction of the average number of children per couple imply a longer period in which adults have parents while at the same time they have fewer siblings with whom to share responsibilities. Although extended families and co-residence of elderly adults and their children is still the most common household arrangement in Latin American and the Caribbean, this is rapidly changing.
As in most developing countries, increased population mobility involves complex decisions with respect to caring for the elderly, since older individuals increasingly live alone (or with their partners). For example, in Chile, the percentage of households in which individuals over age 64 lived alone rose from 5 to 11 percent between 1990 and 2015. With increasing age, the prevalence of dependency and disability augments the need for caretaking. According to a SABE (Spanish acronym for Health, Wellbeing and Aging) survey of seven cities in Latin America and the Caribbean, the disability rate among men was 16 percent for the group aged 60 to 64. That increased to 47 percent for those aged 90 and over. For women, it rose from 24 to 57 percent.
Growing burden for women
All these factors combined imply a growing burden in terms of caretaking, and women are usually the ones who take up such responsibilities within and outside the home. In Mexico, for example, according to data from the National Survey of Time Usage, 33 percent of women aged 25 to 44 devote 40 or more hours a week to simultaneously caring for children under age 14, the elderly and dependent or disabled individuals. For women aged 45 to 64, the percentage is 15 percent.
In Chile, data from the CASEN household survey show that women who report regularly caring for or providing unpaid support within and outside the home to children, older adults or other family members with some degree of dependency, are about 46 years old, and live in households with an average of 4.5 members. The incidence of monetary poverty among these women’s households is higher than for other households.
In most developing countries, the role of women as caretakers of children, older adults and functionally-dependent individuals often limits their income-generating opportunities and reinforces a vicious cycle of inequality and poverty. The fact that women generally outlive men, together with women’s more limited employment opportunities and their landing more precarious jobs when they do participate in the labor market, means that in old age women have more difficulty than men in accessing retirement pensions and healthcare coverage.
No one becomes younger and neither do our countries. Population estimates indicate that by 2050, a fourth of Latin Americans will be over age 60.
The ratio of individuals aged 20 to 64 for each person aged 65 or more is currently 7.3 on average for the region; this will decline considerably in the coming years. By 2050, this ratio is expected to be below 2, in five countries of the region.
These data demonstrate that in our work to foster prosperity and reduce poverty in the region, it’s increasingly imperative to address and resolve, from different sectors, the unequal burden that women of the “sandwich generation” face.