If a country’s capital embodies the nation, then Rome, the eternal city, symbolizes Italian demographic trends. Italy is the old man of Europe, and rapidly getting older.
 | An Italian flag hangs from the side of the Colosseum in Rome. The average Italian is 42.5 years old making Italy the third oldest country in the world behind Japan and Germany (Photo: Reuters) |
La dolce vita, the Italian way of life made famous by the classic movie, is getting longer and longer. Increasing life expectancy and falling birth rates mean that today one in five Italians is 65 or over, the highest proportion in the world. By 2040, one in ten Italians will be at least 80 years old. Italians live longer than most other Europeans: women average 84 years, men 78 years. But will this longer life be a sweet one as well?
For one, Italians are having fewer children. Fertility has fallen to 1.3 children per woman, well below the replacement level of 2.1. In 2005, the birth rate in the city of Genoa was only half the death rate. As a result, Italian population growth has halted. And while retiree numbers swell, the workforce is shrinking. The Lisbon Council predicts that in 2030, Italy will employ 15.7 percent less people than in 2005.
Italy’s demographic trends mirror other rapidly aging societies like Germany and Japan. But Italy’s healthcare system, strong families, labor market, and pension system suggest that of all industrialized nations, Italy will be the one of the most profoundly affected by population aging.
Caring for familiy
It seems like an odd predicament. Italians are Europe’s healthiest people, according to the University of Leicester. They spend about 92 percent of their lives in good health. Between 1991 and 2000, severe disability among the elderly declined. But with greater longevity the growing need for long-term care might reverse this trend.
So far, Italians’ astonishing health and their strong family ties have prevented dramatic increases in public healthcare costs. Between 2000 and 2006, state health spending increased by only 2.8 percent a year, compared to the OECD average of 5 percent.
Italian children take responsibility for their aged parents, more so than in northern Europe. The Istat Survey on Family Networks in 2002 found that only one percent of Italian children entrusted their parents to nursing homes. Over half of pensioners lived within a kilometer of a son or daughter, while 12 percent of people over 74 years old lived with their children. With fewer children to rely on, however, Italy’s elderly face new challenges in the future.
A woman’s choice
One reason for this decline in fertility is that Italian women still have difficulties balancing work and children. Part-time work, flexible hours, and affordable childcare facilities are scarce. Italian children are amongst “the least likely” in the OECD to attend nursery up to the age of two.
Young women in Italy are better educated than ever and so full-time careers beckon. They are therefore postponing marriage and children. The average Italian mother is 31 years old when she gives birth for the first time. Another factor is that Italian children stay at home well into adulthood, due to traditional family culture and more contemporary difficulties finding stable employment. In 1990, 14 percent of 30 to 34 year old Italians still lived with their parents, but by 2005 one third did.
“This postpones family formation and limits couples’ reproductive behavior,” says Rossella Palomba of the Institute of Research on Population and Social Policies in Rome.
More government support could help, argues the Italian Institute for Family Policy. Italy offered 272 euros in family benefits per person in 2005, well below the EU-27 average of 470 euros. About 1.2 percent of GDP is spent on family benefits compared to the European average of 2.1 percent.
Recent policy changes such as a “baby bonus” of 1,000 euros per child, family allowances for low-income families, or longer parental leave entitlements have yet to prove their effect on birth rates.
Immigration
What has made a difference is immigration. Only the arrival of three million immigrants in the last decade has prevented the Italian population from shrinking. Births to immigrant mothers accounted for about half of all those registered between 1995 and 2005.
Historically, Italians emigrated in search of work, but now the tables have turned. Immigrants rejuvenate an aging workforce, and their children fill otherwise empty classrooms. One key service immigrants provide is care for the elderly. Many Italian families hire immigrant badanti, literally ”care workers.”
The pension burden
Italy may still get a good deal on healthcare or child benefits, but it spends more on old age pensions than anywhere in Europe, as much as 40 percent of income tax revenues. Italian pensions are traditionally among the most generous in the world so Italians have relied on the state rather than private insurance or saving schemes. They also retire early. Although the official retirement age is 65 for men, most retire five years earlier.
Among the G7 nations, Italy has by far the lowest proportion of 50 to 64 year-olds in the workforce: only 45 percent in 2005 compared to 64 percent in Germany and 72 percent in Japan.
Successive governments have sought to lighten the pension load since the 1990s. They have increased the retirement age and introduced incentives to retire later. These reforms should reduce pension entitlements from 90 percent of earnings to a little over 60 percent, according to the European Commission Working Group on Ageing Populations.
Heavily reliant on shrinking pensions and shrinking families, a long life might not be so sweet after all for many of Italy’s elderly.
editor: James Tulloch
publishing date: September 16, 2008
