This chapter outlines the methodology and assumptions that will be used in Chapters Twelve, Thirteen and Fourteen to look at our analysis of the policy systems in 1979, 1997 and 2008 using a model lifetime approach.

A model lifetime profile captures a very large portion of a policy system, in this case on personal taxation and benefits and other income-related policy areas. The fundamental idea is to be comprehensive in order to profile the synthesised performance of as large a set of policy rules as possible and to show interactions and cumulative effects. This approach is similar to putting policy rules into a controlled test situation using simulated cases. If each policy system were a car, the approach would be analogous to testing each car on a testbed using different parameters and combinations of passengers and driving speeds. Each car tested in this manner could be compared consistently according to a pre-set agreed number of iterations comparing numbers of passengers, driving speed, fuel consumption, fuel efficiency and wear and tear. Rather than being realistic ‘lifetimes’, our model lifetime profiles are thus primarily heuristic devices used to compare policy systems. However, the idea of a lifetime is a resonant one; life histories evoke interest and empathy and allow readers to place themselves in the policy comparison in a way that a more abstract approach cannot. This is obviously not the real world and in the rest of this chapter we set out the assumptions that are used to consistently compare the tax and benefit systems of our sample years using a lifetime perspective. We then outline the measurements we use to compare the systems consistently.

Why turn to a hypothetical modelled world? The previous chapters have shown how difficult it is to separate the ‘policy story’ from the huge changes that have occurred in the economy and population since the 1970s. One huge advantage of simulation is thus to control for changes and to isolate the effects of policy change from other effects. It allows us to use one element of the empirical story of change, the policy rules, and apply them consistently to profiles of changing circumstances. This approach allows us to examine how the 1979, 1997 and 2008 policy design creates different outcomes if everything else is held constant.