On March 22, our first meeting of the day was at the Banca d'Italia. Roberto Torrini, (European MMF fellow) gave a presentation about the Italian economy. Usually, a powerpoint presentation on economics seems like it would make my eyes glaze over, but it was actually very interesting. Most of the statistics were taken from the Organization of Economic Cooperation and Development, so I will mention only the highlights.
1. Until 2006, Italy did not have statistics on immigrants, because until 10 years ago, Italy didn't really have immigrants. After WWII, the Italians had their baby boom and Italians were still emigrating away from the country. Now that generation is retiring from the work force and the fertility rate has dropped below replacement levels. So they need immigrants now to work. Most of the immigrants are from Northern Africa, Eastern Europe, and South America. Of the Eastern Europeans, Mr. Torrini mentioned that Albanians and Romanians working in construction and manufacturing, and Ukrainian and Polish women working as domestic help.
2. Only 50.6% of women aged 15 to 65 are employed. They don't know why the rate is so low, but did mention that discrimination and cultural values may have something to do with it.
3. The Italian government have invested heavily in the elderly and not the youth. Pensions for retired people account for 15% of the gross domestic product (GDP). In Italy, people can retire after working for only 17 years! So people retire in their 50s. (In the States, I'll be lucky if I can retire when I'm 70.) There's no big disincentive to work because there's not a big government funded safety net. Young people (aged 15 to 24) live longer and longer at home because they can't find jobs, can't afford to live on their own, and so live at home and rely on their parents' pensions.
4. Like most of Western Europe, the gap bettwen GDP per capita and productivity is widening and the Italian economy is in decline.
5. Only 15% of Italians have a college education, compared to almost 40% in the US, 50+% in Japan, and 50+% in Canada. 6. 25% of Italians are entrepreneurs, compared to 7% in the US. That's because Italy has regulations in place that restrict chain stores from setting up in Italy. And entrepreneurs use their savings, pensions, or their parents' pensions for start-up capital.