The Great Recession and charitable giving

ABSTRACT

We examine the impact of the Great Recession on charitable giving. Using the Panel Study of Income Dynamics, we estimate a variety of specifications and find sharp declines in overall donative behaviour that is not accounted for by shocks to income or wealth. These results suggest that overall attitudes towards giving changed over this time period.

KEYWORDS:

• Altruism
• Great Recession
• charitable giving
• philanthropy

JEL CLASSIFICATION:

• D64
• H41

Acknowledgements

We received valuable comments from Jeffrey Clemens, Daniel Hungerman, John List, Benjamin Marx, Robert McClelland, and Harvey Rosen. We are especially grateful to Mark Wilhelm and Xiao Han for providing the data used for this paper.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ See Wilhelm (2006) for details on the construction of the data set.

² We cluster standard errors at the household level in all models.

³ These include age and its quadratic, race, gender, retirement and disability status, number of children, self-reported health, marital status, education, and religious affiliation. These variables are reported for the head of household.

⁴ For flexibility, we use a series of indicators for various levels of income and wealth. The results are not appreciably affected by using, for example, a linear and quadratic parameterization, nor by interacting income and wealth.

⁵ The set of demographic controls is adjusted to include only time-varying variables; age is collinear with the head and year effects and is excluded. Including broader bins for age does not impact the results.

⁶ Recall that the usual approximation in a log-linear regression does not hold for such large coefficients in absolute value; for example, an effect of −0.50 log points is a 39.3% reduction.