Faith-based charity and crowd out during the Great Depression
By: Jonathan Gruber, Daniel M. Hungerman.
Contributors: National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 11332; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 11332.
Publisher: National Bureau of Economic Research
Published: 2005
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Church charities -- United States -- History.; New Deal, 1933-1939.; United States -- Economic conditions -- 1918-1945.; United States -- Social conditions -- 1933-1945.
Description: "Interest in religious organizations as providers of social services has increased dramatically in recent years.  Churches in the U.S.  were a crucial provider of social services through the early part of the twentieth century, but their role shrank dramatically with the expansion in government spending under the New Deal.  In this paper, we investigate the extent to which the New Deal crowded out church charitable spending in the 1930s.  We do so using a new nationwide data set of charitable spending for six large Christian denominations, matched to data on local New Deal spending.  We instrument for New Deal spending using measures of the political strength of a state's congressional delegation, and confirm our findings using a different instrument based on institutional constraints on state relief spending.  With both instruments we find that higher government spending leads to lower church charitable activity.  Crowd-out was small as a share of total New Deal spending (3%), but large as a share of church spending: our estimates suggest that church spending fell by 30% in response to the New Deal, and that government relief spending can explain virtually all of the decline in charitable church activity observed between 1933 and 1939"--National Bureau of Economic Research web site.
Notes: Includes bibliographical references.
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