With working-age populations projected to decline rapidly, all European countries face an unprecedented demographic challenge. Inflows of regular foreign workers are thus key to support employment and growth. This column argues that Italy, where the demographic decline is particularly sharp, has a lot to learn from its neighbours to make its migration policies more effective and aligned with the country’s economic and social needs.
Population ageing in Europe has significant economic consequences, especially on the labour market, with further implications for economic growth and public finances. Many countries are compensating for the demographic decline in the short and medium term with inflows of immigrants. The size and composition of these flows are therefore increasingly important for the resilience of the labour market and the balance of the welfare system (Frey 2025).
Italy, one of the fastest-ageing countries in Europe, is a relevant case-study in this landscape. Its working-age population has already begun to shrink, and forecasts indicate a more pronounced decline in the coming decades (Eurofund 2025). The recent evolution of employment clearly reflects the importance of immigration, which Over the past two decades has accounted for virtually all employment growth. The contribution of migrants to the Italian labour market, however, has often been concentrated in unstable, low-paid jobs. Moreover, Italy lags behind other large European economies in terms of migration policies, which date back to the 1990s and early 2000s, when the country was just beginning to experience large-scale immigration. Except for a few recent, non-structural adjustments, they have remained largely unchanged. Integration policies, including pathways to citizenship, do not yet adhere to international best practices (Abbiati et al. 2025).
In Basso et al. (2025), we first describe the most recent trends in migration flows in the main EU countries and their effect on the labour market. We then analyse migration policies in different European countries and the recent reforms in Italy, highlighting areas where the Italian framework could be improved in line with the best European practices.
An ageing labour market and the role of migration
The progressive ageing of the population is a common trend among European countries; among the major euro area economies (France, Germany, Italy, the Netherlands, and Spain), Italy is the most exposed. Eurostat projections show that without an increase in migration, the population will decline significantly over the next decade (Figure 1). In this context, immigration becomes a vital lever.
Figure 1 Changes in working-age population (ages 15–74) between 2023 and 2035 under different migration scenarios, percentage of 2023 population
Notes: The figure shows the projected percentage change in the working-age population (ages 15–74) between 2023 and 2035 under various migration flow scenarios, as outlined in the Eurostat population projections (EUROPOP2023).
Source: Authors’ elaborations on Eurostat, EUROPOP2023.
Immigrants positively contributed to the euro area employment growth in recent years
Immigration has already played a key role in balancing European countries’ labour markets. Between 2005 and 2023, these economies all experienced positive contributions from immigrants, which, in the case of France, Germany, and the Netherlands, was added to that of natives. The latter was zero for Spain and even negative for Italy. It follows that, without the contribution of immigrants, the consequences of the demographic change in the Italian context would have been very negative for overall employment growth (Figure 2).
Figure 2 Employment growth between 2005 and 2023 by country of birth, percentage change
Notes: Figure shows the decomposition of total employment growth from 2005 to 2023, highlighting the respective contributions of natives and foreigners. Panel B reports percentage point differences in activity, employment, and unemployment rates between immigrants and natives. The data pertain to individuals aged 15 to 74 years.
Source: Authors’ elaborations on Eurostat, EU-LFS.
Research shows that in Italy, as in most advanced economies, immigration does not reduce the overall employment prospects of native-born workers, as immigrants typically have lower-paying and less desirable jobs. Nonetheless, there may be some adverse effects for specific groups or sectors (Labanca 2020, Fusaro and López-Bazo 2021). The future impact of immigration will depend on who arrives and how well they integrate into the workforce.
Migrants’ characteristics and labour market needs
The major euro area countries also differ regarding the characteristics of the migrant population. The proportion of migrants with tertiary education is lower in Italy than the European average, and most of them enter the country for family reunification or seasonal work. Meanwhile, channels of migration tied to study or skilled jobs remain limited.
This pattern reflects domestic demand focused on low-productivity sectors and a regulatory system that does not prioritise skill-based selection. Therefore, opportunities to attract highly qualified workers remain scarce in Italy. The quota-based entry system, which allocates permits by country of origin and job sector, does not reflect the actual needs of employers.
Recent reforms and unresolved challenges in Italian migration policies
Some recent reforms introduced novelties with respect to past migration policies. A three-year planning, which allows for greater predictability, and new extra-quota entry channels, which are aimed at skilled workers from third countries, provided more opportunities for qualified foreign workers to settle.
However, there is still much to be addressed. The system lacks a structured selection mechanism based on professional criteria and effective tools to attract skilled workers. The latter has partly been delegated to generous tax policies for those who decide to move to Italy from abroad (Martinez 2022). Even in the absence of a formal evaluation of these interventions, there is little evidence that the composition of immigrants has improved significantly in the years when Italy has had a particularly advantageous tax regime compared to other European countries.
Another way to improve the skills of the foreign population and accommodate the needs of employers is to integrate and train low-skilled foreign workers who are already present in the country or who want to move there (Abbiati et al. 2025). Integration policies offer a relatively high return on investment, and numerous initiatives abroad have demonstrated their effectiveness. Denmark, for example, is one of the countries with the most well-documented and successful integration policies (Arendt et al. 2022, Foged et al. 2024, Foged et al. 2024).
In Italy, however, the integration system suffers from limited resources – particularly for active labour market policies and language training – and is fragmented across numerous institutional actors, with weak overall coordination. Support services for job placement and recognition of qualifications are inconsistent and often inaccessible. Without such tools, the systematic teaching of the Italian language and institutions, and an effective support for job placement, migrant labour is likely to be used sub-optimally. This is reflected in the very low level of Italian language proficiency and poor access to training services for migrants (Figure 3).
Figure 3 Migrants’ language knowledge and participation in formal education and informal training
Notes: The figure shows the distribution of foreign-born individuals in terms of their knowledge of the destination country’s language in 2021 (panel A), attendance of language courses in 2021 (panel B), participation in formal education in 2022 (panel C), and engagement in informal training over the past 12 months in 2022 (panel D), in Italy and in the four main euro area countries – France, Germany, the Netherlands, and Spain (EA-4). For the latter group, the shares are weighted by each country’s population. Rounding errors in the graphs are due to missing values in the survey responses.
Source: Authors’ elaborations on Eurostat, EU-LFS.
One of the most effective ways to integrate migrants is through citizenship, on which recent reforms have been adopted in Germany and Spain. The economic literature evaluating previous German citizenship reforms shows that naturalised immigrants tend to perform better than non-naturalised immigrants in terms of employment probability, quality of employment, and income (Gathmann and Keller 2018, Gathmann and Garbers 2023). This difference may partly reflect a greater desire for integration among immigrants who pursue citizenship. Nevertheless, it shows that simplifying the path to citizenship – a complex issue in itself – could play a key role in improving immigrants’ integration into host countries.
Three priorities to improve migration policy effectiveness
In light of the available evidence, three priority areas can be considered for all countries facing fast population ageing. The first relates to selectivity. Introducing explicit criteria for assessing applications – linked to education, work experience, and the needs of firms – improves the allocation of skills. The second relates to integration, by strengthening training pathways and fostering greater cooperation between institutional levels. Finally, obtaining citizenship should be based on objective criteria, for example by linking it to the completion of a course of study or the attainment of language standards. Italy represents an ideal laboratory for implementing such policy actions. The alignment of demographic, production, and social inclusion objectives should make it possible to integrate migration into the country’s development rather than treating it as an emergency measure.
Source : VOXeu
