Italy Expected to Lose 700,000 Workers Over Next Five Years, Budget Office Warns

Italy’s workforce is projected to shrink by approximately 700,000 over the next five years as the country continues to grapple with a declining birth rate and an aging population, the head of the Parliamentary Budget Office said this week.

Speaking before a parliamentary commission on demographic trends, UPB President Lilia Cavallari said the demographic shift, which began in 2014, shows no signs of reversing. She noted that the share of the population classified as young is expected to stabilize at around 24% in the medium term.

“If we maintain current employment rates, we will have a loss of 700,000 workers in the next five years,” Cavallari told lawmakers.

The aging composition of the labor force is also likely to have productivity implications, she said. A significant portion of the workforce now consists of baby boomers—those aged 50 to 64—who are approaching retirement.

Cavallari warned that spending on health care and pensions will increase as a result, though she expressed confidence that Italy’s public finances would remain stable.

To mitigate fiscal and labor market pressures, she emphasized the importance of preserving the link between life expectancy and the retirement age.

Italy, like many developed nations, is facing long-term structural challenges tied to its demographic profile, with implications for both economic growth and social welfare sustainability.