Does Welfare Spending Crowd Out Charitable Activity? Evidence from Historical England Under the Poor Laws. (3rd October 2015)

• Record Type: Journal Article
• Authors: Boberg‐Fazlić, Nina; Sharp, Paul
• Is Part Of: Economic journal. Volume 127:Number 599(2017)
• Page Start: 50
• Page End: 83
• Publication Date: 2015-10-03
• Subjects: Economics -- Periodicals; Économie politique -- Périodiques; 330.05
• DOI: 10.1111/ecoj.12251
• Languages: English
• ISSNs: 0013-0133

Abstract

Abstract : This study 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 at the parish level, thus giving heterogeneity within a single country. Using data on poor relief spending combined with data on charitable incomes by county 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 and when looking at first differences.