Context:

• Severely depleted birth rate is affecting the entire Europe significantly. Italy has recently set a new all-time low, as there were no births in the entire country for three months.

Why the low birth rate in Italy? – Reasons 

• Italy has one of the lowest fertility rates, with an average of 1.26 children per woman in 2022.
• Below the replacement rate of 2.1 children per woman needed to maintain a stable population.
• Reasons for Low Fertility Rate:
• Economic uncertainty
  • Changing gender roles
  • High cost of childcare
  • Lack of family support

Negative Net Migration

In 2022, there were 147,000 more departures than arrivals due to following reasons: 

• Economic opportunities: Many young Italians are emigrating to other countries in search of better economic opportunities.
• High unemployment: Italy has a high unemployment rate, especially among young people.
• Political instability: Italy has a history of political instability, which can deter people from immigrating to the country.

Consequences

• Shrinking Workforce: The number of people of working age (15-64) is projected to decline from 35.8 million in 2023 to 31.9 million by 2050.
• Declining Tax Revenues: This is making it difficult to fund public services such as healthcare, education, and pensions.
• High Dependency Ratio: The dependency ratio is the number of people who are not working divided by the number of people who are working. Italy has a very high dependency ratio, which is putting a strain on the working-age population.
• Regional disparities: The population decline is most severe in southern Italy, where there are high rates of unemployment and emigration. 
• Social and cultural impacts: The population decline is leading to a loss of cultural vitality and a sense of community.

What steps has the Italian Government taken to increase the birth rate in Italy?

• Financial Incentives: The Italian government has incentives for people to have more children, such as tax breaks, childcare subsidies, and paid parental leave.
• Immigration Policies: More flexible immigration policies to attract more workers to the country.
• Support for Families: Increased support for families, such as affordable childcare and flexible work arrangements.

Way Forward 

• Health and Education Spending: Better health facilitates improved economic production.
  • Investment in education is crucial for preparing the working-age population for the demands of the economy.
• Increase Female Workforce Participation: Implement legally compulsory gender budgeting to analyze gender-disaggregated data and its impact on policies.
  • Increase childcare benefits to support working mothers.
• Bridge Skill Gap: Emphasize the importance of vocational skills development and promote internships to provide practical experience.
• Encourage Foreign Capital Inflows: Aim for a Gross Fixed Capital Formation (GFCF) of 33% of GDP to meet growth and job creation goals.
• Transition from the Agriculture Sector: Facilitate the absorption of labor into productive employment in non-agricultural sectors.

Also read: India-Italy Bilateral Relations

Conclusion:

The alarming decline in the birth rate in Italy necessitates urgent and comprehensive measures to address demographic challenges and ensure a sustainable future for the country.