Demographic challenge and industrial policies. What to do?

Demography has recently gained attention in the Italian public debate. Unfortunately, it has to be said, it is lagging far behind both the other countries with which we compare ourselves and the time it takes to respond adequately to the challenges it poses. The content of the hearings held in recent weeks by the 'parliamentary commission on the economic and social effects of the demographic transition underway' gives an idea of how much the various institutional actors and national research bodies consider the situation in which we find ourselves to be particularly serious. It may be useful, then, to clarify a few points so that the debate can really lead to a constructive confrontation and not remain stuck on partial opposing readings.

A first point is that the problem is not the increase in life expectancy per se. This is a positive challenge that only a confused country unable to manage the changes of its time can turn into a negative fact. When does it actually become a problem? When people are not put in a position to build a solid foundation for a long, active and healthy life, but also when there is a marked quantitative imbalance between generations due to the continuing collapse in birth rates. The countries in demographic crisis are the weakest in these two respects.

A second point to clarify is the fact that in the final part of the demographic transition, all countries tend to slip below the equilibrium level in the ratio between generations, i.e. below two children per woman. Not everyone is in the same situation, however. Today's French and Swedish women reaching the age of 45 have an average number of children of over 1.8, which means that future cohorts reaching the age of 45 by mid-century will remain substantially solid. In contrast, the fertility rate of Italian 45-year-olds is around 1.35, which means that cohorts entering working age tend to shrink by about a third. Implementing effective policies, therefore, makes a difference, but it is also true that they need to be renewed and readjusted to changing needs and expectations over time.

Italy's marked decline in fertility is undoubtedly the cause of our greatest imbalances in the ratio of old to new generations. However, it is equally true, here lies the third point to be made, that an increase in it is no longer sufficient in itself to resolve these imbalances. This is for two reasons. The first is that the persistence of the birth rate at low levels has come to erode the population at the age of having children. The second reason is the fact that a substantial increase in birth rates in the coming years would lead to a more robust generational change in the labour market from 2050 onwards. An upturn in the birth rate is therefore a necessary condition to avoid even more pronounced imbalances in the coming decades, but it alone cannot provide answers to current needs. Properly managed and regulated immigration provides a double benefit. The first is to compensate for the reduction in the working-age population by directly meeting the needs of companies and organisations in various sectors. The second is to strengthen the population of reproductive age, thus helping to boost birth rates. But immigration itself is not enough. If family, gender and generational policies do not improve, our country will remain unwelcoming and unattractive: the most dynamic and qualified immigrants will tend to choose other countries or consider Italy only as a transit country.

Overall, the concept that must be clear is that what it takes to reverse the birth rate trend also tends to increase the country's economic development, family welfare and social sustainability. Gross domestic product depends on three elements: the number of people of working age, the employment rate, and productivity. All these factors are interdependently linked with the mechanisms of demographic dynamics.