The Impact of Mandates and Tax Limits on Voluntary Contributions to Local Public Services: An Application to Fire Protection Services
The past twenty-five years have seen a tremendous increase in interventions by state governments into local public service provision through mandates related to employee compensation and production processes and tax and spending limitations. Reflecting this phenomena, a substantial literature has arisen examining the impact of these mandates on both spending on and the quality of public services. Here, we focus on another impact of mandates on public services, the use of volunteers and fund-raising by local governments. We develop a model of contributions to local public services, which predicts that tax limits increase both the use of volunteers and fund-raising and mandates increase the use of volunteers. These predictions are then tested using data on 1,846 fire-protection departments in twenty-eight states in 1993. Specifically, we examine how the existence of mandates and tax limits influences the type of department (volunteer; paid; or combined) as well as on the extent of fund-raising. The results of our empirical work generally support our theoretical predictions. The existence a tax limit makes it 11% more likely that a department (of mean characteristics) is volunteer and 10% more likely that it engages in fund-raising. A mandated pension increases the probability that a department is volunteer by 13% and increases the likelihood that it engages in fund-raising by approximately 7%.
|Date of creation:||16 Apr 1997|
|Note:||Type of Document - Binary Word for Windows (V.6/7) document; prepared on IBM PC Compat.; to print on HP LaserJet; pages: 37|
|Contact details of provider:|| Web page: http://econwpa.repec.org|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Borcherding, Thomas E & Deacon, Robert T, 1972. "The Demand for the Services of Non-Federal Governments," American Economic Review, American Economic Association, vol. 62(5), pages 891-901, December.
- William D. Duncombe, 1991. "Demand for Local Public Services Revisited: the Case of Fire Protection," Public Finance Review, SAGE Publishing, vol. 19(4), pages 412-436, October.
- Freeman, Richard B, 1997.
"Working for Nothing: The Supply of Volunteer Labor,"
Journal of Labor Economics,
University of Chicago Press, vol. 15(1), pages S140-66, January.
- Richard B. Freeman, 1996. "Working for Nothing: The Supply of Volunteer Labor," NBER Working Papers 5435, National Bureau of Economic Research, Inc.
- Freeman, Richard Barry, 1997. "Working for Nothing: The Supply of Volunteer Labor," Scholarly Articles 4632239, Harvard University Department of Economics.
- Case, Anne C. & Rosen, Harvey S. & Hines, James Jr., 1993. "Budget spillovers and fiscal policy interdependence : Evidence from the states," Journal of Public Economics, Elsevier, vol. 52(3), pages 285-307, October.
- Gruber, Jonathan, 1994. "The Incidence of Mandated Maternity Benefits," American Economic Review, American Economic Association, vol. 84(3), pages 622-41, June.
- Burton Abrams & William Dougan, 1986. "The effects of constitutional restraints on governmental spending," Public Choice, Springer, vol. 49(2), pages 101-116, January.
- Figlio, David N., 1997. "Did the "tax revolt" reduce school performance?," Journal of Public Economics, Elsevier, vol. 65(3), pages 245-269, September.
- O'Sullivan,Arthur & Sexton,Terri A. & Sheffrin,Steven M., 2007.
"Property Taxes and Tax Revolts,"
Cambridge University Press, number 9780521035996, December.
- Summers, Lawrence H, 1989. "Some Simple Economics of Mandated Benefits," American Economic Review, American Economic Association, vol. 79(2), pages 177-83, May.
- Bogart, William T., 1991. "Observable Heterogeneity and the Demand for Local Public Spending," National Tax Journal, National Tax Association, vol. 44(2), pages 213-23, June.
- Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-1458, December.
- Menchik, Paul L. & Weisbrod, Burton A., 1987. "Volunteer labor supply," Journal of Public Economics, Elsevier, vol. 32(2), pages 159-183, March.
- Harold W. Elder, 1992. "Exploring the Tax Revolt: an Analysis of the Effects of State Tax and Expenditure Limitation Laws," Public Finance Review, SAGE Publishing, vol. 20(1), pages 47-63, January.
- Brown, Eleanor & Lankford, Hamilton, 1992. "Gifts of money and gifts of time estimating the effects of tax prices and available time," Journal of Public Economics, Elsevier, vol. 47(3), pages 321-341, April.
- Kingma, Bruce Robert, 1989. "An Accurate Measurement of the Crowd-Out Effect, Income Effect, and Price Effect for Charitable Contributions," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1197-1207, October.
- Thomas F. Stinson, 1978. "Household Allocation of Voluntary Labor in the Production of Fire Protection: Minnesota Evidence," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 60(2), pages 331-337.
- Poterba, James M & Rueben, Kim S, 1995. "The Effect of Property-Tax Limits on Wages and Employment in the Local Public Sector," American Economic Review, American Economic Association, vol. 85(2), pages 384-89, May.
- Brueckner, Jan K., 1981. "Congested public goods: The case of fire protection," Journal of Public Economics, Elsevier, vol. 15(1), pages 45-58, February.
- Rhine, Sherrie L W, 1989. "The Effect of State Mandates on Student Performance," American Economic Review, American Economic Association, vol. 79(2), pages 231-35, May.
- Alexander M. Thompson III & Barbara A. Bono, 1992. "Alienation, Self-Actualization and the Motivation for Volunteer Labor," Review of Radical Political Economics, Union for Radical Political Economics, vol. 24(2), pages 115-123, June.
- Bergstrom, Theodore C & Goodman, Robert P, 1973. "Private Demands for Public Goods," American Economic Review, American Economic Association, vol. 63(3), pages 280-96, June.
When requesting a correction, please mention this item's handle: RePEc:wpa:wuwppe:9704002. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (EconWPA)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.