Recipient organisationInstitute for Fiscal Studies
Funding£8.7M
PeriodSept 2020 — Sept 2025
In plain English
AI plain-English summary
Every year, the UK government spends hundreds of billions of pounds on taxes, benefits, pensions, and public services—and the Institute for Fiscal Studies (IFS) wants to know exactly what that money does to people’s lives. The problem is that policies often have unintended ripple effects: a tax cut might boost work incentives for some but leave others worse off, while a benefit reform could change how families save or where they live. Current economic models struggle to capture these complex, long-term reactions. The IFS will build new microeconomic models that simulate how individuals, families, and firms actually respond to policy changes over their lifetimes, using detailed data on incomes, spending, employment, and health. If successful, this work will give the Treasury, the Department for Work and Pensions, and other government bodies a far more accurate way to test policy options before they are implemented—potentially saving billions in poorly targeted spending and preventing unintended harm to vulnerable households. The research also trains a new generation of economists skilled in empirical policy analysis, strengthening the UK’s capacity for evidence-based decision-making across tax, welfare, education, and health policy.
View original technical description
Our goal at the Institute for Fiscal Studies (IFS) is to promote effective economic and social policies by better understanding how policies affect individuals, families, businesses and the government's finances. The ESRC Institute at IFS acts as a national resource to conduct and disseminate world-class research to inform policy. We aim to: (a) make major scientific progress in understanding how individuals and firms behave and how they react to government policy and their broader economic and institutional environment; (b) ensure this knowledge is used to have substantial positive impact on the operation and evaluation of policy across a broad range of areas; and (c) operate as a national resource to build technical and policy capacity by exploiting and collecting new types of data, collaborating internationally and with those in other relevant disciplines, and training a new generation of highly skilled researchers. These objectives contribute directly to promote and support the production and application of world-class, independent social science. Our research agenda covers a broad range of topics and is designed to address major challenges the UK and other economies face in ensuring the resilience of households, firms and the broader economy. It will continue to evolve in response to the changing policy landscape. Our agenda is organised around five interconnected themes: inequalities and living standards; tax and benefit reform; human capital and productivity; the challenges of an ageing population; and demands on public expenditure and public services. Our research focuses on the impacts of policy and importantly on the mechanisms through which those impacts arise. This means we need to: model how people make decisions through their lives and the interactions between different economic actors; understand the context within which decisions are taken; use appropriate evaluation methods, and develop new ones where they do not exist; and develop new data and measurement tools where needed. Our main focus is on policy in the UK, but we also work with and inform policy debates in the US, Europe, and low- and middle-income countries. We regularly interact with researchers worldwide, exploiting our unique team-based research environment for capacity building in empirical policy research.
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