Proceedings at this roundtable session got underway with the participants observing that an aging population, immigration and the brain drain are issues that Italy needs to address by looking to the future as well as at the past. Indeed, the current state of affairs is the product of previous trends. In decades gone by, there was a surplus of births over deaths and a negative migration balance, but today that situation has been reversed. Thus, enquiring into how things were as well as how they are likely to be in the future is helpful for shaping policies to deal with demographic changes which, it was noted, have turned out to be very different from those forecast by the UN itself no less than ten years ago.
Migration flow management cannot, on its own, provide the key to reversing the processes underway. Immigration plays an extremely important role, including in terms of labor supply, but it would take 690 thousand new arrivals a year to reverse the current trends. That would be difficult to sustain, particularly considering the global fall in migration. However, what could make a real difference are measures aimed at increasing the fertility rate (which is stuck at 1.4 births per woman and is lower than that in other countries), at overhauling personal care and health policies, and at encouraging young people aged between 25 and 30 to stay in the country. Indeed, in respect of the latter, the participants pointed to statistics showing that the number of Italians in that age group moving abroad exceeds the number of young immigrants arriving in Italy.
It was stressed that in the absence of targeted policies, Italy will be confronted with three questions in the future. The first of these relates to birth and fertility rates. The country has been below the generational replacement level (that is, fewer than two births per woman) since 1977, and immigrants have not succeeded in making a significant contribution to reversing this trend, because their birth rate is increasingly approaching that of Italians, and because, as evidenced by massive remittance flows, they harbor a desire to return to their countries of origin. Today, there are around 80 thousand births a year amongst the immigrant population, but in four years, the fertility rate of non-native women has fallen to Italian levels. It was noted that in advanced economies, there is a positive correlation between female employment ratios and fertility rates. Thus, more needs to be done to facilitate the entry of women into the labor market, particularly by adopting support mechanisms for SMEs.
The second issue relates to optimizing the country’s stock of human capital. In this regard, the participants highlighted that young people in Italy are finding it difficult to leave the family home (which prevents them from assuming full adult responsibilities) or they are leaving the country. Finally, the third question concerns the aging of the population. The number of great-grandparents is overtaking the number of great-grandchildren, and in addition to an increase in the number of people over 65, Italy is also seeing a rise in over-80-year-olds. It is this gradual growth in the number of people within the elderly age brackets that is posing some of the more difficult challenges. Whilst the pension system is now sustainable thanks to recent reforms, there is still a need to better integrate the country’s tax and social security systems.
Turning to the area of health and personal care services, the participants felt that this sector requires special attention, also taking into consideration the older population’s propensity to save. The growth in the number of single-person households, particularly amongst the elderly, results in greater vulnerability and a loss of the family support network. Attention was drawn to the necessity of considering the proportion of voters that are over 65 and over 80, and the consequences that this might have on the kind of policies capable of generating social consensus.
Reference was made to a study on global aging conducted by Standard & Poor’s and published in October, according to which government debt in advanced economies is set to explode over the next 40 years. The forecast scenarios indicate that, in the absence of containment measures, the deficit/GDP ratio will be as high as 400% for countries such as France and Germany, whilst for Italy, where it is currently at 115%, it should not exceed 245%. The participants highlighted that this advantage should serve as a foundation for further improvements in the pension system, and in the areas of savings and health policy. Over-65-year-olds may already have or develop several chronic conditions, for which hospitalization is not the best treatment option. It is with the aim of reducing hospitalization rates and encouraging treatment centered on the individual that the structure of healthcare provision is moving towards the large hospital model. Technology will also need to provide a means of ensuring that people in older age brackets are better able to contribute to productivity, a necessary prerequisite, along with savings, for the pursuit of constant economic growth. Finally, in order to reverse or at least reduce the erosion of savings associated with aging, the participants stressed the need for policies that encourage people to take out supplementary health and – in the case of young people – pension cover.