Italy is undergoing a profound and silent transformation in which demographic, economic, and social dynamics are intertwined. The shocks of recent years – the pandemic, the energy crisis, inflation – have accelerated processes that were already underway and subjected communities’ resilience, and the country’s ability to renew its development model, to new pressures. At the center of this change lie two crucial phenomena: demographic fragility and the progressive weakening of the middle class, with consequences for poverty, social mobility, and productivity.
On the demographic front, in 2024 Italy saw the lowest number of births since the country’s Unification in the 19th century: fewer than 370,000, compared with the peak of 1.34 million in 1964. The accompanying increase in life expectancy, from 67 years to 83, has amplified intergenerational imbalances. Each year the country is losing the demographic equivalent of a city like Bologna. In the coming decades, the number of the very old will grow exponentially, to more than two million over-90s. The number of single-person households, which now account for nearly 10 million people, is also increasing, with implications for housing demand, care needs, and social vulnerability.
The fertility rate has been below 1.5 children per woman for more than four decades, and today only 36% of women born in 1973 have had two or more children. The “fertility gap” between the number of children desired and the number actually born is one of the highest in Europe. Difficulties in access to housing, job stability, and work-life balance prevent many young people from translating their desires into family choices. Women’s average age when their first child is born has risen to 32.6 years; this has implications for the probability of having a second or third child. Most childless women live in economically weaker regions, a sign of the decisive impact of poverty on demographics.
Alongside this, Italy is experiencing a growing social imbalance. Over the past fifteen years the economy has shown resilience in terms of growth and profitability, but wealth has become even more concentrated: the richest 5%, who previously held 40% of total wealth, now hold 48%, while the share held by the poorest 50% has fallen from 8.5% to 7%. Absolute poverty now affects 5.7 million people – almost 10% of Italians – with a marked increase in the north of the country. The “new poverty” affects not only the unemployed and foreigners, but also workers with stable employment: poor households with one employed person have almost doubled in the last decade. The fall in average pay, which is below 2019 levels, has mainly hit the middle class, which has seen a significant decline and growing vulnerability.
The labor market reflects these imbalances. Italy is still in bottom place in Europe for female participation, at 60% against an EU average of 73%. The transition to parenthood continues to penalize mothers in particular, even though female employment is a necessary condition for demographic and social sustainability. While the proportion of individuals not in education, employment, or training has fallen from 26% to 15%, it is still holding back growth. This is compounded by the sharp imbalance in talent mobility: between 2014 and 2023 Italy lost 97,000 young graduates, and in 2023 alone net migration for graduates was -15,700. The result is a burden on a country that invests in, but does not always reap the benefits of, education.
The reduction in the working-age population is undermining productivity and welfare sustainability. Immigration is going some way, but not far enough, to offset the negative balance: to achieve this would require 500,000 incoming migrants per year, a level that is far higher than current trends and, moreover, difficult to manage. Meanwhile, more than two million jobs remain unfilled due to the mismatch between the demand and supply of skills and expertise, in both technical and highly qualified roles.
Against this background, businesses, together with the state and the third sector, need to form a “social trident.” Areas of intervention include support for low-income families through corporate welfare tools; the promotion of women’s employment, with flexibility, care services, and equality-oriented governance; continuing education and training, and structural collaboration between businesses, schools, and universities; the inclusion of foreign workers and a recognition of the value of diversity; investment in sustainable productivity and innovation; and strengthening regional partnerships with foundations and third sector entities.
Italy’s regions, cities, and towns are experiencing these situations differently. In the south, Palermo, while experiencing growth in GDP and employment, is seeing a sharp demographic decline, very low incomes, and a growing proportion of single-person households. In the north, Parma – perceived as affluent – is witnessing an increase in inequality and has initiated a local social pact to strengthen shared welfare, while Milan is seeing new forms of fragility related to precarious housing arrangements and urban loneliness.
Demographics is not just a set of data but a key to interpret the country’s future. If the quantitative population decline is not accompanied by sufficient quality improvements – in human capital, innovation, and training – it will continue to undermine growth, welfare, social mobility, and collective trust. A national strategy based on structural, not temporary, policies is needed: in addition to the points already made, lawmakers’ attention should also be focusing on the issue of philanthropic bequests.
The challenge concerns not just the economy, but the resilience of democracy and the social contract. A new pact between generations, institutions, and businesses is needed to restore prospects, rights, and opportunities to the country and to its people.