g y i s a d o p t e d , w h i l e t h e l o n g i t u d i n a l d i m e n s i o n o f d a t a a l l o w s c o n t r o l l i n g f o r t i m e i n v a r i a n t u n o b s e r v a b l e s. I m p l e m e n t a t i o n i s b a s e d o n a c o m b i n a t i o n o f s t r a t i f i c a t i o n a n d p r o p e n s i t y s c o r e m a t c h i n g m e t h o d s .

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractEach year, the Government decides how much to raise benefits and tax allowances. In the UK the basis for these upratings is rarely debated, yet has major long-term consequences for the relative living standards of different groups as well as for the public finances. This paper considers the medium term implications of present uprating policies which vary across parameters of the tax-benefit system. Continuing for 20 years, other things staying the same, would result in a near doubling of the child poverty rate alongside a substantial gain to the public finances. At the same time pensioners are largely protected by the earnings indexation of pensioner benefits and, in time, the basic state pension. We show how difficult it will be to meet the UK child poverty targets unless the greater inequality inherent in the current regime for uprating payments and allowances is redressed. JEL: D31, I381 We acknowledge financial support from the Joseph Rowntree Foundation and are grateful for useful advice and suggestions from the project Advisory Group members

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