Aruba’s Demographics and Its Potential Impact on the Labor Market and Output

Historically, Aruba benefited from population growth that expanded the labor force, thereby boosting productivity and fostering economic growth—a phenomenon known as the “demographic dividend”. However, declining fertility rates and a rapidly aging population are altering the balance between the economically active working population and those dependent on them. This study analyzes recent demographic trends and their potential impact on the labor markets and medium-term growth. Then, it discusses policies that could help to increase labor force participation (LFP) and reduce bottlenecks on further growth.