Welfare and birth rate

Talking about the Welfare State and the birth rate implies discussing two issues:

1. The effect of the welfare state on the birth rate;
2. The effect that the birth rate has on the welfare state.

The Welfare State is the set of institutions that developed at the end of the 19th century, to respond to certain risks that - with the development of industries - have become social risks (for example, the risk of unemployment, illness, disability...). The Welfare model had to adapt to the change that it had brought about within society. There are 2 significant changes in the Welfare model:

1. The aging of the population: the population has had better opportunities from an economic point of view, this has lengthened the average life span of individuals;
2. The change in the role of women, since the role of women in society has changed in general.

The reduction in the birth rate is also due to this latest change: in a world where women participate differently in the labor market, it becomes complicated to manage the time between work and family. This is one possible explanation. The reduction in birth rates, together with the lengthening of life expectancy, brings with it the phenomenon of population aging.

Aging in itself is an extremely positive result of Welfare, and of the fact that we are able to live better, more prosperously within society. From the point of view of the stability of Welfare, however, this poses a series of significant challenges, because our welfare system is financed in distributions, consequently the active, today, pay for welfare services that support people in need.

What can the birth rate do for Welfare?

We need to increase the number of active people, because the projections from a demographic point of view are quite complicated. If the fertility rate were to be further reduced (with a consequent reduction in the number of women of childbearing age), we would always have greater difficulty in maintaining welfare as we have known it until now. Various solutions are therefore triggered, some in the short term that must necessarily pass through greater consideration of migration flows, because birth trends are reversed only in the long term; In the long term, we should also focus on the issue of increasing birth rates, which have now fallen below 400,000 births per year.

How do you increase the birth rate?

Let's get into a very complicated matter. From an economic point of view, we always think about incentives, also helping women to reconcile work time with time to devote to families. A relevant issue is the issue of the single and universal allowance for children. It should be remembered that part of the funds that financed this new tool, which is a transfer to families, come from previous deductions for children, as part of Irpef.  The second point is the development of the nursery system. The PNRR can certainly help, even if the latest revision speaks of a reduction in funds.

We should focus on instruments that help women to participate more in the labour market, because we observe that, where women participate more, there are also those circumstances in which women have more children.