Aging and pensions in Italy: highlighting regional disparities

Population aging in Italy is well underway. In 2017 the proportion of individuals over 65 years old was around 22.3% and according to the Aging Index (AI) there were 165 over 65 per 100 individuals between 0 and 14 years old. The Italian National Institute of Statistics (ISTAT) estimates that population aged 65 and over is expected to increase to 33% by 2050, while the AI will reach the value of 262. Italy is becoming one of the oldest countries in the world while its economically active population is shrinking, and such an unstoppable trend is likely to place significant pressure on economic growth and public expenditures due to an increased demand of public health care services and pensions. With data drawn from demographic, labour force, and pension system statistics available from the ISTAT this paper replies Bongaarts’ calculations (2004) to estimate the aging burden at different geographical levels (NUTS1&2). Empirical results show that population aging will lead to huge increases in public pension expenditure over the next five decades in the absence of changes in employment (ER) and in the Pensioner Ratio (PR). More targeted interventions will require mixing pension and employment policies to further reduce public expenditure linked to population aging.