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 7.1: The old-age dependency ratio, defined as population aged 65+ divided by population aged 15-64, for G7 countries, Australia and less developed regions based on the United Nations definition 70 Japan 65 manassas Italy Germany 60 -- Canada 55 UK France 50 Australia USA 45 me...=. . Less developed regions 40 Old-age dependency ratio (in %) 35 30 25 - 20 - 15 - 10 1975 1980 1965 1970 1990 2015 1985 1995 2025 2010 2000 2020 2030 2040 2035 2045 2050 1960 2005 Year Source United Nations. 1960-2010 actual, 2011-2050 forecast