Plunging Italian population can affect tax base, economic innovation

Italy’s population this year started what is expected to be a long and steady decline, a trend analysts say is likely to have an impact on its tax base, pension costs and economic innovation.

UN statistics estimate that Italy’s population has peaked at 59.3 million, fourth highest in the EU. The average net increase of 192 migrant arrivals per day is no longer enough to compensate for the average death rate of 1,721 per day, compared with the average births of 1,325. That means, on average, the country’s total population is diminishing by one person every seven minutes.

Italy’s internal census estimates show a similar total population, but indicate the country’s population will edge higher for nearly a quarter of a century more, peaking at around 64 million in 2042.

But regardless of the estimates used, analysts agree that the country’s low birthrate and rising life expectancy is resulting in an aging population.

The average Italian is now 45.1 years old, the second oldest population in the world, behind only Japan. And this is expected to give rise to a host of demographic problems. “As a population ages, it creates obvious problems for pensions, health care costs and labor markets,” Maria Silvana Salvini, a demographics expert at the University of Florence, told Xinhua. “But there are also less evident problems such as less innovation, whether in business, technology or culture.”

Alessandro Polli, a professor of economic statistics at Rome’s La Sapienza University, noted that many mature, industrialized countries have similar issues. But he said the problem is particularly pronounced in Italy. “There are cultural factors involved, but there is also the problem of more than 30 years of policies that did nothing to improve the situation,” Polli said in an interview.

The problem is not new to Italy. From the late 1920s to the early 1940s, Italy had a controversial “Battle for Births” program under Fascist leader Benito Mussolini, with the goal of increasing Italy’s population from 40 million in 1927 to 60 million in 1950.