Fiscal Implications of Population Aging in Chile

This paper studies the long-term macroeconomic and fiscal implications of population aging in Chile using a semi-structural, multi-sector macro-fiscal model that links demographic dynamics, labor market behavior, sectoral production, fiscal revenues, age-related public expenditures, and government debt. Beyond the application to Chile, the contribution lies in the integrated nature of the framework, which allows for a consistent analysis of how demographic change propagates through the economy to affect fiscal sustainability. Chile provides a particularly relevant case given the speed of its demographic transition, the growing importance of publicly financed pension benefits, and the central role of consumption taxation, as well as a production structure in which mining plays a key role in shaping fiscal capacity.