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Does government spending crowd out voluntary labor and donations?

Julia Bredtmann and Fernanda Martínez Flores

IZA World of Labor, 2023, No 299v2, 299

Abstract: Private charitable contributions play an essential role in most economies. From a policy perspective, there is concern that comprehensive government spending might crowd out private charitable donations. If perfect crowding out occurs, then every dollar spent by the government will lead to a one-for-one decrease in private spending, leaving the total level of welfare unaltered. Understanding the magnitude and the causes of crowding out is crucial from a policy perspective, as crowding out represents a hidden cost to public spending and can thus have significant consequences for government policies toward public welfare provision.

Keywords: private philanthropy; time and money donations; government spending; crowding out (search for similar items in EconPapers)
JEL-codes: H11 H51 (search for similar items in EconPapers)
Date: 2023
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Journal Article: Does government spending crowd out voluntary labor and donations? (2016) Downloads
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