1.Refer to the figure below. What is the key message for policy makers based on the evidence provided? Refer to the interview with Prof. Piggott. How is this evidence related to the structure of pension systems around the world? In particular, discuss the PAYG systems and possible alternatives (eg Australia's pension system).

Figure:

Figure 7.1: The old-age dependency ratio, defined as population aged 65+ divided by population aged 15-64, for G/ countries, Australia and less developed regions based on the United Nations definition 70 Japan 65 Italy Germany 60 Canada UK 55 France 50 Australia USA 45 Less developed regions 40 Old-age dependency ratio (in %) 35 ....s 30 25 20 15 - 10 - 5 - 1975 1965 1970 2015 2025 1995 2010 2040 1980 2030 2035 1985 1990 2000 2020 2050 2045 1960 2005 Year Source: United Nations 1960-2010 actual, 2011-2050 forecast