The demographic outlook and its long-term effects on the Country’s ability to grow

By 2041, the population over 80 will exceed 6 million; that of people over 90 will even reach 1.4 million: an unprecedented demographic situation that poses major challenges to the sustainability of the country’s system.

The phenomenon becomes even more critical when analysing the demographic dynamics in the different regions. Inland areas, which were particularly critical in terms of accessibility to services, were characterised by a marked demographic decline and progressive population aging; these phenomena were even accentuated by strong emigration, especially of young people, which was not offset by as many inflows. Demographic decline and aging in the inland areas have been observed since 2011, while in the central areas, the phenomenon has been evident since 2015.

Over the past twenty years, the population living in inland areas has decreased from 23.9 percent to 22.7 percent of the total residents in Italy. At the same time, the ratio of elderly to young people of working age increased. As of 1 January 2023, the inland areas had, on average, 122 residents aged 65 or older for every 100 young people aged 15-34 (it was 73.6 in 2002), but in many municipalities in the Apennine belt this figure exceeded 160; in the central areas this ratio was 116.7 (it was 69.5). The decrease in the young population, thus, has a greater impact on inland areas, especially those in the Centre and South. It risks exacerbating the already well-known elements of fragility in these areas and feeding the spiral of continuous population reduction.

The demographic mechanisms just described are, therefore, already largely implicit in the present age structure. Consider that baby boomers of the 1960s are now essentially out of the range of reproductive ages conventionally set at 15-49 and are about to enter the so-called “third age”.

This shift, combined with longer life expectancy and declining birth rates, will make a determinant contribution to the massive demographic aging to come over the next three decades, with significant effects not only on the social level but also on the growth potential of the economy.

Breaking down the dynamics of per capita GDP, it is possible to pinpoint the effects produced by certain elements of change in the economic, social, and demographic structure on the evolution of the level of economic wealth per inhabitant of Italy and the major EU27 economies over the past two decades. Despite the limits of the method adopted and confirming the central role of productivity as the engine of economic wealth growth, the analysis shows how a gradual process of depowering of per capita GDP growth has begun due      to the aging of the population, particularly that of working age. 

This effect of a demographic nature may be amplified by limited labour force participation, particularly noticeable among young people and women. This development, admittedly common to other major EU countries, is  particularly  marked  in Italy, not only given its demographic evolution prospects but also the peculiar structural characteristics of its labour market and production system.

The substantial increase in the elderly population will constitute an unprecedented, vast change for Italy. On the qualitative level, action can be taken to improve their well-being, so that longer life horizons can go hand in hand with years lived in good health, autonomy, and a satisfying relationship life.

Young people to be the driving force for change and renewal in the country

Youth participation in the economic and social life of the country is crucial to  ensure a more inclusive and sustainable development model, economic growth, and the very balance of the welfare system. The Next Generation EU Programme recognises the centrality of the “youth” factor in addressing future challenges arising from the demographic, digital, and ecological transition. 

Demographic forecasts, however, show that young people will be an increasingly less available resource in Italy’s future. To escape from this situation, it is essential to promptly and radically reverse the trend, unfortunately, inveterate in our country, of dissipating the energies and skills of the new generations.

In 2022, nearly one in two young people (47.7 percent of the 10 million 273 thousand 18–34-year-olds) showed at least one sign of deprivation in one of the key domains of well-being (Education and Work, Social cohesion, Health, Subjective well-being, Territory). In this set, more than 1.6 million (or 15.5 percent of the 18–34-year-olds) were multi-deprived, that is, they showed signs of deprivation in at least 2 domains. 

Levels of deprivation and multi-deprivation were consistently highest in the 25-34 age group, the most vulnerable one, consisting of those entering adult life and facing such crucial milestones, like entering the labour market, leaving the family of origin, starting an independent life, entering a union, and choosing to become parents. An analysis of multi- deprivation confirmed that for most young people, reaching these milestones was increasingly an obstacle race. The postponement of such milestones has been, indeed, the most common reaction of generations entering adulthood over the past decades. On  the  other  hand,  precarious  and  fragmented  work experiences and low social mobility have compromised many young people’s opportunities to realise their aspirations and discouraged their active participation at various levels, political, social, and cultural.