For more than 25 years, Jardín Sonrisitas (“Little Smiles Kindergarten”) taught kids their ABCs in Villa del Cerro, a working-class portside district in Uruguay’s capital. But in December, the beloved kindergarten closed: one of three local creches to shut in as many years.

Today, the building’s shutters are pulled down, its outdoor play equipment piled to one side. The reason is simple, said Catalina Clara, 38, whose six-year-old daughter was one of the last four students: “People aren’t having many kids anymore.”

In fact, only about 29,000 babies were born in Uruguay last year—down from about 49,000 a decade ago, reaching lows last seen in the 19th century. Deaths have outnumbered births for six years straight. As the number of school-age children shrinks, an additional 80 private schools in Greater Montevideo are projected to close by 2030. Even at those still open, many sense a new era is underway. “For us Latinos, large families have a positive connotation,” said Ignacio Cassi, the principal of Montevideo’s prestigious Colegio Seminario, where the student body has shrunk 10% in five years. “It’s hard not to feel a certain nostalgia.”

Uruguay is not alone: Latin America is in the early days of a historic demographic transformation, one that seems destined to reshape politics, businesses, communities, and how people live for decades to come.

Statistics only begin to capture the impact. According to UN data, the fertility rate in Latin America is now 1.8 births per woman: down from six in 1950, and below the replacement level of 2.1. By 2100, if current trends hold, national populations will decline by a third in Chile and Uruguay, a quarter in Brazil, and a fifth in Argentina.

North America, Europe and parts of Asia have all seen similar trends since the 2010s. But in Latin America, the decline has accelerated beyond all forecasts, sending policymakers scrambling to gauge the impact on everything from taxes and pensions to future economic growth. Incredibly, Chile now has a lower birthrate than Japan. Recent censuses found populations significantly smaller than officials expected in Brazil (203 million, not 213 million) and Chile (18.5 million, not 20 million). Paraguay’s 2022 survey arrived at a figure of just 6.1 million, not 7.5 million: a fifth smaller than previously assumed. “We’ll basically have to plan for a new Paraguay,” the baffled economy minister told reporters.

Given that life expectancy has also been rising as birthrates fall, today’s Latin America is now aging faster than any other region in the world. In 1980, just 5% of the population was over 65. That figure has since doubled—and will grow to 25% in 2050. “This will bring enormous consequences,” said Luis Rosero-Bixby, a veteran demographer and founder of the Centro Centroamericano de Población at the University of Costa Rica. “It means profound changes in various parts of society.”

Call it the Gray Tide: a political and economic sea change even greater in scope and impact than the so-called Pink Tide of leftist governments that transformed the region at the turn of the 21st century. Where the Pink Tide depended on fleeting external conditions—a rising China, soaring commodity prices—the continent’s increasingly top-heavy population pyramid reflects trends that are seemingly here to stay.

Yet where some see crisis, some others see opportunity. Businesses are investing in expected future growth areas from accessible tourism to care homes and robotics, part of a so-called “silver economy” projected to more than double in size in Latin America to some $650 billion by 2033. And many everyday people see smaller families not as a national emergency, but a path to a more fulfilling and sustainable life.

Indeed, if the region prepares now, it may be able to slip into middle age gracefully, according to Cristina Querubín, a consultant for the Inter-American Development Bank (IADB).

“It’s almost an unavoidable process,” Querubín said. “The real challenge is how we adapt to these changes, and how our societies can age with greater dignity.”

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