Which policy measure is commonly used to address aging populations' labor participation?

• A. Expanding tariffs on imports.
• B. Pension reform that adjusts retirement age and benefits.
• C. Reducing funding for healthcare.
• D. Limiting immigration.

Answer: (B)

When a population ages, more people reach retirement age while the workforce grows slower, so governments look for ways to keep people in paid work longer and keep pension systems sustainable. Pension reform that adjusts retirement age and benefits does exactly that: it encourages people to work longer by aligning benefits with longer life expectancy and the actual length of working life. By gradually raising the retirement age or recalibrating benefit formulas, the economy benefits from a larger active labor force and pension systems become more financially stable over time. Other options don’t directly address this balance between aging workers and labor participation: tariffs affect trade, cutting healthcare funding can harm workers’ health and productivity, and restricting immigration changes overall labor supply but doesn’t specifically incentivize longer working lives.