Projecting Italy's labour market: assessing the sustainability of the workforce by 2050

Abstract

Istat produces annual projections on population and households to describe future demographic trends, providing both overall values and detailed age and sex breakdowns. In a context of rapid population ageing, Italy stands out as one of the oldest countries in the world, with a mean age of the population close to 47 years. This demographic evolution draws attention to the sustainability of the future of the labour market, in terms of both size and age pattern of the active population. On 1 January 2025, the working-age population (15–64 years) represents 63.4% of the total, marking a slight decrease compared to 2024. In contrast, the share of those aged 65+ reaches 24.7%, up by 0.4 percentage points from the previous year. Ageing, longer education and low fertility are expected to reshape labour supply in the coming decades, with major implications for economic growth, welfare systems, and policy planning. In this work we present a secondary level projection model to evaluate labour market trends in Italy up to 2050. The analysis focuses on activity rates by sex and five-year age group. The model is based on a static approach where predicted activity rates are applied to population forecasts. Key factors influencing labour participation are explicitly considered, including increasing life expectancy, delayed entry into the labour market due to higher education attainment, and the progressive rise in retirement age. However, the aim of this work is not to estimate future employment or unemployment rates, given the many economic implications that would require consideration in a medium-long term perspective. The main goal is to assess the long-term sustainability of the labour market and to explore how demographic dynamics may affect the availability of the workforce in the future.