Januaria R.
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The impact of the aging population on the Italian economy
General introduction of the Italian economy
The Italian economy is the third-largest economy in the European Union with a GDP of $2.1 billion in 2021 and a GDP per capita of $33.551 Italy is the eight-largest exporter in the world and its closest trading partners, in terms of exports, are mostly countries of the EU: Germany, France, the US, Spain and the UK. The Italian economy depends on “industrial districts” (ID) which are areas, mostly located in the North and in the Center of Italy, where medium and small-sized firms and workers are concentrated. Each district specializes in an industry sector, for example in the city of Prato they are specialized in woollen fabric, in Canelli they are specialized in wine, and so on and so forth. The majority of these districts are specialized in one of the four “A’s” of the famous Made in Italy: in Italian stands for "Agroalimentare, Automobili, Arredamento e Abbigliamento", but in English is :Agriculture, Automobile, Clothing and Furniture.
Aging population and low birth rates
The Italian population in 2021 amounts to 59.07 million, which is 1,36 million less than 8 years ago. If the situation stays the same, Italy's population in 2050 will amount to 54,2 million. But why? Italy has a big percentage of elderly and a decreasing number of births.
Long lifespan
According to Statista, in 2020 Italy had the third oldest population in the world, after Japan and Monaco. 23% of Italians are 65 years old and older, and the average age of the population is 47.7 years old. In comparison the average age of the French population is 40,8 years old. Such a long life expectancy, according to some scientists, is because of several factors:
-The Mediterranean diet which is full of fresh and seasonal fruit and vegetables, not a lot of meat and extra virgin olive oil instead of butter. In general, it is a diet without processed food.
-The urban structure which makes walking easier compared to other countries like for example the US, which is full of highways and there aren’t a lot of sidewalks.
-The Italian way of life which isn’t hectic but rather slow, therefore stress and anxiety is less widespread.
Fertility crisis
Italy is the least fecund country in Europe. Since 2008, births have kept on dropping, and during the year 2020 they arrived at only 404,892 births, which represents an average of 1.24 babies per woman. You could expect a very religious country like Italy to have a high natality rate. Instead, as I have just said, it isn’t the case. Even If the Pope has made many speeches about natality and has encouraged women to have a baby in order to follow the traditional structure of a big catholic family, this situation doesn’t depend on women's will.
On the contrary, this situation is caused by many aspects:
-The job market is too unstable and doesn’t offer enough permanent contract jobs, so couples don’t want to raise a baby in a difficult financial situation.
-The Italian government doesn’t put in place financial subsidies in order to help couples build a family (there aren’t kindergartens that are state-funded like in France).
The impact on the economy
The declining number of births and the increasing life expectancy cause a number of social and economic issues.
The first issue is the lack of young and healthy people that are very much needed as a workforce in order to support the economy. The second issue is the lack of public facilities, like hospices and nursing homes, that have to accommodate such a high number of elderly. The third issue is the rising cost of public health, considering that in Italy health insurance is public, therefore paid by active people’s taxes, but if the labour force is smaller and smaller, who pays these costs? The fourth issue follows on from the third. It is about retirement costs. In Italy, a "redistributive" retirement system is in place, which means that someone who is working now and is paying taxes. With these taxes financing the retirements of the current elderly, it is like a “pact between generations”. The problem is that if the situation continues like this, in the future there will be more elderly and not enough young workers to pay for their retirements.
720 words
Bibliography
-Wikipedia contributors. (2022, 20 novembre). Economy of Italy. Wikipedia. https://en.wikipedia.org/wiki/Economy_of_Italy
-Wikipedia contributors. (2022a, juin 14). Industrial district. Wikipedia. https://en.wikipedia.org/wiki/Industrial_district
-5 reasons why people in Italy live longer | Visititaly.eu. (s. d.). https://www.visititaly.eu/history-and-traditions/why-people-in-italy-live-longer-reasons
-Statista. (2021, 9 septembre). Aging population of Italy - Statistics & Facts. https://www.statista.com/topics/8379/aging-population-of-italy/#topicOverview
-The four “AS” of the Italian economy. Adriano Antonello.
https://www.hangon.com/sites/default/files/ipcm_42_november_december_ibix.pdf
Hey Januaria!
ReplyDeleteI didn't know that the population was so old in Italy!
To ad another reason to why people don't make babies anymore, maybe climate uncertainty has something to do with it ... Don't you think?
Do you think that the election of Giorgia Meloni will change anything?
Hugo.P
Many countries currently have a very ageing population. It includes Japan and Germany. But it is clear that this is a real problem for the economy and the growth of the country.
ReplyDeleteI wonder how to reverse the trend? Because many countries like France use a pay-as-you-go pension system. We can therefore ask ourselves if it would not be better to set up a funded pension so that the working-age adult can receive a decent pension. It would allow working people to save for their retirement.
But, this would disrupt the system that has been in place until now.
In your article you talk about the fact that families can no longer afford to have a large family because of unstable jobs and so on. Perhaps we should start by stabilising employment by imposing more security for employees and maybe Italy should create a system of subsidies for the arrival of each newborn child.
I don't know. I think that this is a challenge that many countries, even France, will have to face. According to INSEE, people aged 65 and over in France represent 18.8% of the population, a very significant increase over the last 20 years. In 2060, 23.6 million people would be over 60 years old, that is to say one person in three.
This shows us that this affects all countries and especially the people of the baby boom generation.
Justine.R
The aging population in Italy is straining the economy by increasing healthcare costs and pension obligations while SiteCountry reducing the labor force and economic productivity.
ReplyDelete