Uruguay rates high for most development indicators and is known for its secularism, liberal social laws, and well-developed social security, health, and educational systems. It is one of the few countries in Latin America and the Caribbean where the entire population has access to clean water. Uruguay's provision of free primary through university education has contributed to the country's high levels of literacy and educational attainment. However, the emigration of human capital has diminished the state's return on its investment in education. Remittances from the roughly 18% of Uruguayans abroad amount to less than 1 percent of national GDP. The emigration of young adults and a low birth rate are causing Uruguay's population to age rapidly.

In the 1960s, Uruguayans for the first time emigrated en masse - primarily to Argentina and Brazil - because of economic decline and the onset of more than a decade of military dictatorship. Economic crises in the early 1980s and 2002 also triggered waves of emigration, but since 2002 more than 70% of Uruguayan emigrants have selected the US and Spain as destinations because of better job prospects. Uruguay had a tiny population upon its independence in 1828 and welcomed thousands of predominantly Italian and Spanish immigrants, but the country has not experienced large influxes of new arrivals since the aftermath of World War II. More recent immigrants include Peruvians and Arabs.