The random country model: an examination of likely demographic surprises in Latin America and their fiscal impact

Timothy Miller, CEPAL
Guiomar Bay, CELADE
Ruiz Magda, CELADE

The Random Country Model (RCM) generates probabilistic population projections for individual countries by sampling from the historical demographic experience of 192 UN member countries. There are plausible reasons why the future may be radically different than the past or in which a particular country may be singularly unique. Nevertheless, the RCM projections provide a useful set of benchmark forecasts by assuming continuity between the past and the future and stressing the commonality of the shared demographic history of countries. Part 1 of the paper presents the RCM projections for 20 Latin American nations. These probabilistic forecasts reveal several likely demographic surprises in relation to current scenario forecasts for these countries: among these, higher life expectancy, lower fertility rates, and larger variations in migration. Part 2 of the paper presents an application of these probabilistic projections by examining probabilistic forecasts of government budgets for 5 of the countries.