Is Italy heading for an intergenerational crisis?

Antony Mason notes that the intergenerational debate is hotting up in Italy, and asks if Italians have even greater reasons to be worried

Last Sunday (22 May) the respected Italian TV programme Report (the equivalent the UK’s Panorama) broadcast an investigation on Rai 3 entitled Generazione a Perdere, making a convincing case that Italy’s young – particularly those in the 18–35 bracket – are in danger of becoming a lost generation.

Italy faces many of the pressures suffered by the UK, such as massive public debt and pensions liabilities, high unemployment, and an ageing population. But in many ways the crisis for the younger generations could be considered more urgent in Italy than elsewhere.

Italy’s birthrate is one of the lowest in the developed world, with only 1.38 children per couple (in Germany it is 1.42, UK 1.82, France 1.89). This can only aggravate the funnel-shaped age demographics weighted massively towards the elderly, and all that implies in terms of pensions and care-costs, with diminishing numbers of young people to meet those needs.

Meanwhile Italy’s youth unemployment stands at close to 30%. Some 2 million young people are NEETs (Not in Employment Education or Training), twice the UK figure.

Short-term, part-time, unpaid

Even graduates find it hard to get permanent work, and many are stuck in a succession of temporary jobs, or unpaid, or low-paid internships on a short-term contract (typically six months), with little guarantee of proper employment at the end of it.

And the rental costs of accommodation are high in proportion to income, if income is available at all.

For all these reasons, a full 60% of young Italians, aged 18–34, still live at home – and almost one in three of these are still living at home aged 30–34. This, of course, has a direct impact on that birthrate. (The UK has a growing live-at-home “boomerang” generation, but the percentages are about half of those recorded for Italy.)

Many young Italians feel frustrated by a government dominated by the older generation – virtually a gerontocracy – which pays scant attention to their needs, provides little support in terms of funding or benefits to youth and young families, or even incentives to share political participation, and seems above all to serve the interests of the older generation that has the vast bulk of the property, capital and cash.

Brain drain

The thrust of Generazione a Perdere is that Italy is beginning to suffer from a worrying brain drain – and a brain drain that is luring away young graduates in particular. These are the very people whom Italy needs to breathe new life into a once-powerful industrial sector (think Fiat, Olivetti, Pirelli, Zanussi), which has been decimated in recent decades by the globalised economy and a lack of local investment and innovation.

Prospects for these young Italians look better abroad, even within the EU – in Germany, France and the UK, for example. And many of them say they are unlikely to return home in the current economic climate.

Is Italy different?

Similar pressures are at work in the UK, where the difficulty of getting onto the home-ownership ladder is one reason why couples are delaying marriage and starting a family, and where many are opting to try their luck abroad (some 20,000 a year find work in Australia, for instance).

But Italy is different in many ways. The young generally move into independent adulthood later than in the UK, frequently staying in tertiary education to the age of 25–27, all the while living at home and being supported by their parents. And the parents will go on supporting them for many years after that, if they have to. The downside to this is that the parents’ (and grandparents’) savings can be depleted as a result, putting their own long-term wellbeing and financial independence in jeopardy.

Some commentators have suggested that the outlook for the young in Italy is so grave that some kind of intergenerational conflict is a real prospect. Others claim the contrary: that the younger generation has the traditional support – financial as well as moral – of the parents, and knows how important this is. And hence, whatever the flashpoints of conflict, it is unlikely to be directed at the older generation, even if core intergenerational issues are at the heart of the crisis.

Posted on: 27 May, 2011

One thought on “Is Italy heading for an intergenerational crisis?

  1. David

    One of the biggest problems in these countries that have rapidly ageing populations is inflexible labour markets; conditions which make it expensive for employers to fire people acting as an incentive not to hire them long-term.

    This insulates the older generation from economic realities, while making it harder for younger people to get into steady, well-remunerated employment.

    Yet at the same time it is very difficult for these young people to agitate for changes to these arrangements, as the result of them is that young people are more financially dependent on their parents who are in the entrenched jobs, often meaning the last thing they want is for their parents to suddenly become unemployed.

    Cutting this knot strikes me as one of the biggest challenges facing Continental European countries during the next few years.

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