Model to provide analysis in terms of lifetime income
Good policy design is a fiendishly difficult business, due to the multiplicity and complexity of the considerations that are involved. One consideration that is often poorly understood is the variable impact that policy can have when considered over alternative time horizons. A welfare benefit may, for example, be interpreted as redistributing income between different members of a population when its incidence is observed at a particular point in time, and be interpreted as redistributing income across the life-course of individuals when considered over longer time horizons. Interest in understanding how policy influences individual circumstances over alternative time spans is an important motivation for the development of dynamic microsimulation models. This project will deliver a microsimulation model to HM Treasury and HM Revenue and Customs that is designed specifically to provide an appropriate basis for exploring distributional implications of policy measured over alternative time horizons, from one year up to the entire lifetime. Working in close collaboration with analysts at HMT and HMRC, the project is due for final delivery by the end December 2013.