Policymakers have used the wide body of research evidence from around the world, which purports to show that children who grow up in poor families experience a wide range of negative outcomes, to justify large increases in benefits to families with children. The most commonly found justification for this approach has been that it serves to improve children's outcomes, both in childhood and later in life.

But we have remarkably little evidence as to how much children's outcomes are likely to improve as a result of giving additional money to their families, and even less on how effective this is likely to be in comparison to spending the same public money in other ways, for example on improving school quality, or neighbourhood services

Our lack of evidence on these important issues stems from the fact that researchers have struggled to find effective methodologies to identify the separate impact of low income in itself on children, from the other factors - both genetic and environmental - impacting on children from low income households.

This project reviews a number of empirical methodologies available to researchers for answering these important policy questions. For each methodology we set out the intuition behind the method, and an example of where it has been used effectively to answer a relevant policy question. We restrict ourselves to methodologies found within the econometric literature.

This work forms the first stage of a larger research programme in which we attempt to apply some of the methods described here to give robust answers to policymakers as to the likely effectiveness of income supplementation policies.