Part of the Italian problem is la dolce vita. Fewer women work in Italy than most places, and the Italian fertility rate is low as well. About 38% of Italian women work, compared with over 50% on average in Europe and close to 60% in the U.S. The Italian fertility rate is 1.5, compared with 2.1 in the U.S. If Italian women went to work and had more bambini, Italy’s economic future would be much brighter. Admittedly, Italian women may be the sexiest in Europe, but the combination of low work participation and low fertility rate suggests that Italian women are getting a free ride at the expense of their country.
Going to work would have the greatest immediate impact because it would increase the country’s GDP, quite possibly significantly. If, for example, 15% of Italian women went to work, the GDP increase could be 7% a year, which would be enough to make Italy’s debts much more bearable.
Just as important for a country that has large, unfunded obligations to older people, increasing the fertility rate to the replacement level of 2.1 could be crucial to the economy’s long-term health. If the fertility rate does not increase, then there must be a substantial flow of immigrants to fill the gap or the promises to the elderly must be repudiated.
The message to Mario Monte is clear: Mobilize the women of Italy to save their country. Beauty is not their only asset.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.