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Does Welfare Spending Crowd Out Charitable Activity? Evidence from Historical England Under the Poor Laws

Author

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  • Nina Boberg‐Fazlić
  • Paul Sharp

Abstract

This paper examines the relationship between government spending and charitable activity. We present a novel way of testing the ‘crowding out hypothesis’, making use of the fact that welfare provision under the Old Poor Laws was decided on the parish level, thus giving the heterogeneity we need to test for the impact of different levels of welfare support within a single country. Using data on poor relief spending combined with data on charitable incomes by county for two years before and after 1800, we find a positive relationship: areas with more public provision also enjoyed higher levels of charitable income. These results are confirmed when instrumenting for Poor Law spending using the distance to London and historical migration to London, as well as when looking at first differences.
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Suggested Citation

  • Nina Boberg‐Fazlić & Paul Sharp, 2017. "Does Welfare Spending Crowd Out Charitable Activity? Evidence from Historical England Under the Poor Laws," Economic Journal, Royal Economic Society, vol. 127(599), pages 50-83, February.
    • Handle: RePEc:wly:econjl:v:127:y:2017:i:599:p:50-83
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    File URL: http://hdl.handle.net/10.1111/ecoj.2017.127.issue-599
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Does State Charity Crowd-Out Private Philanthropy?
      by andrewdsmith in The Past Speaks on 2013-12-04 01:39:53

    Citations

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    Cited by:

    1. Eric Melander & Martina Miotto, 2023. "Welfare Cuts and Crime: Evidence from the New Poor Law," The Economic Journal, Royal Economic Society, vol. 133(651), pages 1248-1264.
    2. Gregory Clark & Marianne E. Page, 2019. "Welfare reform, 1834: Did the New Poor Law in England produce significant economic gains?," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 13(2), pages 221-244, May.
    3. Gibbons, Steve & Hilber, Christian Albin Lukas, 2022. "Charity in the time of austerity: in search of the 'Big Society'," LSE Research Online Documents on Economics 117995, London School of Economics and Political Science, LSE Library.
    4. Panjwani, Aniket & Xiong, Heyu, 2023. "The causes and consequences of medical crowdfunding," Journal of Economic Behavior & Organization, Elsevier, vol. 205(C), pages 648-667.
    5. Clive D. Fraser, 2022. "Faith? Hope? Charity? Religion explains giving when warm glow and impure altruism do not," Manchester School, University of Manchester, vol. 90(5), pages 500-523, September.
    6. Marius A. K. Ring & Thor Olav Thoresen, 2022. "Wealth Taxation and Charitable Giving," CESifo Working Paper Series 9700, CESifo.
    7. Nina Boberg-Fazlić & Paul Sharp, 2018. "North and south: long-run social mobility in England and attitudes toward welfare," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 12(2), pages 251-276, May.
    8. Christine Ablaza & Francisco Perales & Cameron Parsell & Nathan Middlebrook & Richard N S Robinson & Ella Kuskoff & Stefanie Plage, 2023. "Increases in income-support payments reduce the demand for charity: A difference-in-difference analysis of charitable-assistance data from Australia over the COVID-19 pandemic," PLOS ONE, Public Library of Science, vol. 18(7), pages 1-16, July.
    9. Knauf, Jakob, 2022. "Can't buy me acceptance? Financial benefits for wind energy projects in Germany," Energy Policy, Elsevier, vol. 165(C).

    More about this item

    JEL classification:

    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • N3 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy

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