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Tuesday 20th March 2018

Italy’s Ageing Population Slows Economy Down

Lifestyle & Health

Roberto Tumbarello

Thu, 25 Apr 2019 08:32 GMT

In Italian schools next year there will be 70,000 fewer enrollments. This is the first consequence of decreased births. But if the country grows old the economy will slow down. The phenomenon is happening everywhere in Europe, because, thanks to the most widespread well-being, couples wanting to enjoy the pleasures that youth allows are postponing procreation. 

In fact, for some time in Europe – especially in the Mediterranean countries – mortality is higher than the birth rate. Equality was marginally achieved thanks to immigrants, who, even today, bring more children into the world and the gap is widening every year. The 512 million inhabitants of the EU never increase. On the contrary, there are a few thousand less human beings. 

Not to procreate – as was the case once upon a time – does not only penalize the social security that sees the payment of pensions in continuous increase. It penalises the entire economy, which does not regenerate itself, as the generational change is slower. Moreover, many young people – as far as Italy is concerned – emigrate to find work. 

This is confirmed by a recent study by Mody’s, a private but authoritative company based in New York that carries out financial analysis on the activities of commercial and state-owned companies. The negative consequences of aging affect all markets. First of all, food, because older people consume less than young, so they buy less food. 

Car production also slows down, because it is young people who feed sales by changing or buying new cars. Real estate is also falling considerably as fewer and fewer families are building fewer houses, with the consequence that the value of apartments is increasingly diminishing. 

It's the health expenditure that increases, which, however, is borne by the state, so it does not really move the market. Older people also require more heating. 

The welfare and economic growth depends above all on the increase in birth rate of children. But nobody seems to care. Maternity is not promoted, neither is the establishment of nurseries, tax breaks for large families and guaranteed jobs for young mothers, who, on the other hand, are often dismissed as soon as the pregnancy is evident. 

Today the over 65 are one fifth of the population, but in twenty years they will be a third. Italy, where longevity has increased to the age of 83 years for women and to 81.5 for men, will be the oldest country in the world. Therefore, the production and distribution of clothing, catering, culture and tourism will enter into crisis, given that in these sectors the elderly spend less. 

The only institutions benefiting from longevity are banks and insurance institutions, which, however, will see credit demand decline. If, as Moody’s predicts, the Italian population – and perhaps even the European one – will fall by 1%, it means that the working-age population is expected to fall by 13%.  

That is, there will be five million fewer people at work, the equivalent of the inhabitants of Rome, Milan and Turin combined. This is the great problem of not only Italy, but of all European society, which will have to hurry to stimulate greater fertility. If not, sooner or later, it will have to attract immigration that it currently rejects. 

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