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

Author

Listed:
  • Nina Boberg-Fazlic

    (University of Copenhagen)

  • Paul Sharp

    () (University of Copenhagen)

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.

Suggested Citation

  • Nina Boberg-Fazlic & Paul Sharp, 2013. "Does Welfare Spending Crowd Out Charitable Activity? Evidence from Historical England under the Poor Laws," Working Papers 0049, European Historical Economics Society (EHES).
  • Handle: RePEc:hes:wpaper:0049
    as

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    File URL: http://ehes.org/EHES_No49.pdf
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    References listed on IDEAS

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    Citations

    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

    More about this item

    Keywords

    Charity; crowding out hypothesis; England; Poor Laws;

    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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