The NDP Project
Laboratory of the University of Milan – Project of the www.nationaldailypress.it journal – Intesa Sanpaolo Protezione
Professor Luciano Fasano from the Department of Social and Political Sciences at the University of Milan conducted a laboratory session titled “Decision-Making Under Uncertainty: From Expected Utility Theory to Behaviorist and Cognitivist Approaches.”
The session, organized in collaboration with the journal www.nationaldailypress.it, featured Dr. Marco Fossati from Intesa Sanpaolo Protezione, a company within the Intesa Sanpaolo Assicurazioni Group, as the guest speaker.
Il laboratorio ha analizzato tematiche di interesse e di estrema attualità per tutti i partecipanti, studenti ed invitati.
Aging and Social Challenges in the Context of Globalization: Different Choices by China and Italy
In the context of globalization, population aging has emerged as a shared challenge across borders.
Especially under the dual influences of declining birth rates and increased life expectancy, the issue of aging populations is becoming more acute.
Italy and China, as two countries with distinct social systems and economic development levels, have adopted different strategies to address these challenges.
Population Aging: Italy’s Crisis and Response
The State of Aging and Its Social Impact in Italy
The Milan University NDP project’s research on Italian society highlights the severe issue of population aging in the country.
With long-term declines in birth rates and slow natural population growth, the proportion of the working-age population is shrinking year by year. Aging indices and labor force replacement rates show a marked imbalance.
According to Italy’s National Institute of Statistics, since 2009, Italy’s birth rate has continued to fall, with fewer than 400,000 births recorded in 2022, setting a historic low. This trend has led to demographic imbalances, posing threats to economic growth and increasing social expenditure.
Italy’s elderly population ratio ranks among the highest in the EU, with the proportion of those aged 65 and over increasing, adding pressure to public healthcare and pension systems. Aging not only raises costs for healthcare and pensions but also restricts economic growth potential due to a shrinking labor force.
This dual effect of aging and declining birth rates has forced the Italian government to balance social welfare, public investment, and pension reforms.
Pension Reform and Raising the Retirement Age
In response to aging, Italy has implemented a series of pension reforms centered around the Notional Defined Contribution (NDC) system since the 1990s, gradually transitioning from the traditional pay-as-you-go model to the more flexible NDC model. The NDC model records individual contributions and simulates cumulative returns, ensuring that pension levels are linked to years of contributions and economic conditions, thereby reducing fiscal burdens and encouraging delayed retirement.
While raising the retirement age is a common measure across countries, Italy’s implementation has been cautious, focusing on the impact of retirement policy adjustments on social security and the broader economy.
China’s Aging Challenge and Response Measures
China’s Declining Birth Rate and Gradual Retirement Age Increase
Similarly, China faces significant aging challenges against a backdrop of rapid economic growth. China’s natural population growth rate has declined for consecutive years, even turning negative.
On September 13, 2024, China introduced a gradual retirement age extension policy that sparked considerable public debate.
Approved by the country’s top legislative body, the National People’s Congress Standing Committee, the new policy stipulates that starting from 2025, over the next fifteen years, the mandatory retirement age for male workers will gradually be extended from 60 to 63, and for female workers from 50 or 55 to 55 and 58, respectively.
This is the first adjustment to the statutory retirement age since it was set in the 1950s.
The implementation of this policy aims to increase labor supply, ease pension expenditure pressures, achieve financial balance in the pension system, and provide a stable labor supply for economic development.
The retirement age extension not only enhances the sustainability of the social security system but also creates conditions for expanding consumer demand and stimulating domestic consumption.
With the gradual extension of the retirement age, China’s fiscal burden in the areas of elderly care and healthcare is expected to decrease, which is essential for economic restructuring and enhancing the demographic dividend.
Promoting Fertility and Wealth Distribution: Different Cultural and Policy Choices
Comparing Pro-Natalist Policies
To counter declining birth rates, the Italian government has implemented a series of pro-natalist measures, including family allowances and improved childcare facilities. These measures are aimed at supporting young families, raising birth rates, and thereby increasing the future labor supply.
China, on the other hand, promotes birth rates by increasing the flexibility of fertility policies and expanding childcare support, further addressing labor shortages.
Wealth Distribution and Intergenerational Support
Italy shows significant inequality in wealth distribution.
Older generations hold considerable assets, while young people face high unemployment rates and housing cost pressures, making it difficult for them to accumulate wealth.
In contrast, Chinese families often adopt intergenerational support strategies, with parents assisting young adults with home purchases to establish an economic foundation.
In Italian society, wealth is more frequently passed down in the form of real estate, whereas in China, real estate investment is generally seen as a means to grow family assets, thereby supporting economic development.
Future Outlook: Lessons from China and Italy in Addressing Global Aging Challenges
Both China and Italy are working to address aging and wealth inequality challenges.
In pension system reform, delayed retirement, and pro-natalist policies, the two countries have taken different paths but are both committed to promoting sustainable social development and improving residents’ welfare.
By gradually extending retirement ages and optimizing pension systems, China seeks to alleviate fiscal pressures, while Italy adopts the NDC model to achieve balance in its pension system.
These responses reflect the positive adjustments made by both countries in the context of globalization, offering valuable insights for other nations facing similar issues.