Which statement best describes the economic implications of population aging?

• A. It reduces the burden on social protection systems
• B. It increases the burden on social protection systems, requiring policy reforms
• C. It has no impact on labor markets
• D. It automatically boosts savings rates without policy intervention

Answer: (B)

Ageing populations shift the economy by increasing the number of retirees relative to workers, which puts more pressure on social protection programs like pensions and healthcare. Public systems are often funded by current workers, so a larger dependent population makes financing more difficult unless reforms change retirement ages, benefits, or funding mechanisms. That’s why the statement describing a greater burden on social protection systems and the need for policy reforms best captures the economic implications.

Other ideas aren’t as accurate. The burden on social protection is not reduced by ageing; labor markets do feel an impact when there are more dependents and fewer working-age people; and savings rates do not automatically rise just because the population is ageing—saving responses depend on policy settings, pensions, and broader economic factors.