In the United Kingdom, families with children saw benefits grow more quickly than average wages, as benefits are indexed to inflation, and prices grew more quickly than earnings growth during 2007-10. However, substantial budget austerity measures were enacted subsequently and these are projected to lead to significant income reductions mostly after the 2007-2010 period considered here, especially among families with children (Browne, 2012). The 1s1, 2nfl, 310, 4lh and 5,h bars show the change in net transfers for someone earning, respectively, zero, 33, 50, 67, 100 and 150 percent of the Average Wage (AW). A number of earlier studies document that direct taxes and social transfers in the United States reduce income inequalities by much less than they do in much of Europe (e.g., Brandolini and Smeeding, 2009, Smeeding, 2005). Updating and extending the comparative work by Bradley et al. ( In the mid-2000s, taxes and transfers combined reduced the Gini index by 18% in the United States, 23% in the United Kingdom, around 30% in Germany and Poland, and around 40% in Nordic countries.