Category Archives: Journal Article

Government Support and Charitable Donations: A Meta-Analysis of the Crowding-out Hypothesis

Source: Arjen De Wit and Renee Bekkers, Journal of Public Administration Research and Theory, July 28, 2016

Abstract:
With the growing body of literature on governance styles in which nonprofit organizations are involved in creating and implementing public services, there is a need for robust evidence on the effects of public funding on nonprofit revenues. This paper systematically reviews previous studies on the crowding-out hypothesis, which holds that private charitable donations are lower in situations of higher government support and vice versa. We find that about two-thirds of previous estimates find a negative correlation (crowding-out), while one-third of the estimates find a positive correlation (crowding-in). The results are strongly shaped by the research methods that are used. In experiments, a $1 increase in government support is associated with an average $0.64 decrease in private donations, while nonexperimental data analyses find an average increase of $0.06. Random-effects regression models show that, contrary to arguments that are prevalent in the literature, studies that take subsidies to organizations as a measure of government support are less likely to estimate crowding-out than studies that use a measure of direct government expenditures. Central government support is associated with higher charitable donations, while measures that include multiple levels of government tend to find negative correlations. The results challenge the consistency of prior research findings and demonstrate the contextual dependence of the validity of the crowding-out hypothesis.

What Can We Learn from Charter School Lotteries?

Source: Julia Chabrier, Sarah Cohodes, Philip Oreopoulos, NBER Working Paper No. w22390, July 2016

Abstract:     

We take a closer look at what we can learn about charter schools by pooling data from lottery-based impact estimates of the effect of charter school attendance at 113 schools. On average, each year enrolled at one of these schools increases math scores by 0.08 standard deviations and English/language arts scores by 0.04 standard deviations. There is wide variation in impact estimates. To glean what drives this variation, we link these effects to school practices, inputs, and characteristics of fallback schools. In line with the earlier literature, we find that schools that adopt an intensive “No Excuses” attitude towards students are correlated with large gains in academic performance, with traditional inputs like class size playing no role in explaining charter school effects. However, we highlight that “No Excuses” schools are also located among the most disadvantaged neighborhoods in the country. After accounting for performance levels at fallback schools, the relationship between the remaining variation in school performance and the entire “No Excuses” package of practices weakens. “No Excuses” schools are effective at raising performance in neighborhoods with very poor performing schools, but the available data have less to say on whether the “No Excuses” approach could help in nonurban settings or whether other practices would similarly raise achievement in areas with low-performing schools. We find that intensive tutoring is the only “No Excuses” characteristic that remains significant (even for nonurban schools) once the performance levels of fallback schools are taken into account.

How you buy affects what you get: Technology acquisition by state governments

Source: Kawika Pierson & Fred Thompson, Government Information Quarterly, June 24, 2016

Abstract:
Research suggests that governments should rely on standardized information technology solutions rather than custom built ones. We find that, for many categories of taxes, states that have contracted out the development of their tax-processing systems to providers offering standardized solutions see statistically and economically significant increases in collections relative to states that have not. We find no evidence that financial administration expenditures increase for these states. At the same time, there are several categories of taxes where we do not find a positive impact. We reconcile these findings by developing a qualitative argument that standardized solutions in tax administration may be most effective for the types of taxes that are the most difficult to enforce.

How Do Nonprofits Respond to Regulatory Thresholds: Evidence From New York’s Audit Requirements

Source: Travis St. Clair, Journal of Policy Analysis and Management, June 27, 2016

Abstract:
Nonprofits in the United States must comply with various state and federal regulations to maintain their tax-exempt status. Despite persistent calls to increase accountability in the nonprofit sector, there is little research examining the burden imposed by existing regulatory requirements, especially at the state level. This paper uses a bunching design to estimate the avoidance behavior exhibited by tax-exempt charities in response to New York State’s audit requirements. There is clear evidence of bunching in response to the requirement that nonprofits above certain revenue thresholds file financial statements reviewed by or audited by an independent certified public accountant. Measuring the extent of bunching around the revenue notches yields estimates of the average revenue that nonprofits either forego or fail to report in avoidance of the requirements. Results from dynamic estimation show that charities near the threshold for a review engagement report approximately $1,300 less revenue than otherwise predicted by a counterfactual; charities near the threshold for a full audit report approximately $1,400 less. The results have implications for the optimal design of state-level financial regulations.

Why Don’t Housing Choice Voucher Recipients Live Near Better Schools? Insights from Big Data

Source: Ingrid Gould Ellen, Keren Mertens Horn and Amy Ellen Schwartz, Journal of Policy Analysis and Management, June 27, 2016

Abstract:
Housing choice vouchers provide low-income households with additional income to spend on rental housing in the private market. The assistance vouchers provide is substantial, offering the potential to dramatically expand the neighborhoods—and associated public schools—that low-income households can reach. However, existing research on the program suggests that housing choice voucher holders live in neighborhoods with schools that are no better than those accessible to other households with similar incomes. Households, in other words, do not seem to spend the additional income provided by the voucher to access better schools. In this analysis we rely on a large-scale administrative data set to explore why voucher households typically do not live near to better schools, as measured by school-level proficiency rates. We combine confidential administrative data from the Department of Housing and Urban Development on 1.4 million housing choice voucher holders in 15 states, with school-level data from 5,841 different school districts, to examine why the average housing voucher holder does not live near to higher-performing schools than otherwise similar households without vouchers. Specifically, we use the large-scale administrative data set to test whether voucher holders living in areas with good schools nearby and slack housing markets move toward better schools when schools become salient for them—that is, when their oldest child becomes school eligible. We take advantage of the thick sample of households with young children provided through our administrative data to implement both a household fixed effects and a regression discontinuity design. Together these analyses shed light on whether voucher households are more likely to move toward better schools when schools are most relevant, and how market conditions shape that response. We find that families with vouchers are more likely to move toward a better school in the year before their oldest child meets the eligibility cutoff for kindergarten, suggesting salience matters. Further, the magnitude of the effect is larger in metropolitan areas with a relatively high share of affordable rental units located near high-performing schools and in neighborhoods in close proximity to higher-performing schools. Results suggest that, if given the appropriate information and opportunities, more voucher families would move to better schools when their children reach school age.

Public Sector Unions and Privatization: Evidence From the Eldercare Sector in Danish Municipalities

Source: Søren Kjær Foged and Lasse Aaskoven, Journal of Public Administration and Research Theory, June 22, 2016

Abstract:
Privatization varies considerably among local governments. One of the oft-listed explanations is the ability of public employees to block privatization. However, many studies on the influence of public employees on privatization do not use very precise measures of the influence of public employees, they have been unable to isolate a one-way effect, and the studies have not been attentive to whether the effect varies for different market forms. In this article, we focus on privatization in Denmark through a voucher market without price competition for eldercare services. Using new data for all 98 Danish municipalities in 2012, we are able to measure the strength of the public eldercare union as well as the number of the public eldercare workers relative to the number of local voters. We find that the increased union strength measured in terms of union density at the municipal level leads to substantially and significantly less privatization through the voucher market. By comparison, the estimated relationship between the relative number of public workers and privatization does not reach statistical significance. Features of the voucher market and qualitative evidence suggest that the union influence primarily goes through a direct user channel, that is through union influence directed at the service users, whereas a minor effect possibly runs through a political channel, that is lobbying directed at the local politicians.

Shifting Attitudes Toward Corporate Sponsorship of a Public Park Agency: Results From a 14- Year Follow-Up Study

Source: Andrew J. Mowen, Nate E. Trauntvein, Luke R. Potwarka, Nicholas A. Pitas, Nick Duray, Journal of Park and Recreation Administration, 2016

Abstract:
Public sector park and recreation agencies have become more entrepreneurial in their financing and revenue generation efforts. A number of phenomena, including decreased tax-based revenues, have created the need for alternative funding strategies. One such strategy, corporate sponsorship, has become increasingly common within parks and public spaces. While there is an existing body of research concerning sponsorship effectiveness and acceptability in park and recreation contexts, few studies examine the evolution or shift in constituent support for sponsorship over time. Given the increasing ubiquity of sponsorship in society, it is possible that the public has adapted and become desensitized to sponsorship—becoming more positive and favorable toward it across a range of settings. To assess this issue, this study examines whether constituents’ opinions regarding corporate sponsorship of a metropolitan public park agency (i.e., Fairfax County Park Authority) have changed over the course of time. Data were collected in 1998 and 2012 through random surveys of subscribers to the Park Authority’s monthly magazine. Surveys assessed participants’ level of support for corporate sponsorship at the park agency, the perceived impact of sponsorship on the recreation experience, and the perceived appropriateness of specific corporate sponsorship activation activities and conditions. Comparisons between the two time periods were conducted with independent samples t-tests or Chi-square analyses (along with Cramer’s V statistics) in order to determine whether there were significant changes in sponsorship attitudes and what the nature of those changes were. Results suggest that, over this 14-year period, park constituents became significantly more likely to support park sponsorships. There were significant increases in sponsorship favorability toward sponsorship and well as its perceived impact on the recreation experience. Findings also indicate more favorable opinions toward specific sponsorship elements. Park constituents perceived a wider range of sponsor activities and conditions as appropriate. However, certain sponsorship issues remained problematic. For example, respondents still identified specific industries/products as more appropriate than others, were still wary of granting exclusivity to a sponsor, allowing naming rights, and eschewed visible sponsor recognition at trails and historic settings. Findings suggest that park and recreation agencies proceed cautiously and develop clear guidelines to maximize sponsorship’s contribution and minimize its negative impact.

Servicing Our Economy: Producer Service Location and Government Procurement 2004–2010 in the Washington DC Metropolitan Area

Source: S. C. Christopher, R. D. Vese, M. A. Boyd, A. D. Reddy, A. P. Mulhollen, D. E. Zand and T. F. Leslie, Growth of Change, May 15, 2016

Abstract:

Harrington and Campbell (1997) previously illuminated the pattern of producer services’ suburbanization in the Washington, D.C., metropolitan area between 1970 and 1992. Their results showed producer services growing at a faster rate at locations farther from the central city. We revisit the topic utilizing data from 2004 to 2010, assessing not only changes in the distribution of producer services since their work, but also the impact of massive increases in defense spending on producer services’ growth throughout the first decade of the twenty-first century. Multivariate linear regression is used to estimate per capita growth of producer services employment using six independent variables. Our results reveal producer services employment during the time period has grown significantly more quickly in the urban D.C. core than the outer suburbs, contrary to Harrington and Campbell’s research. Additionally, we find per capita producer services employment is self-limiting over the study period: locations with more producer services employment in 2004 experienced significantly less producer services growth over the period. We find federal procurement has no correlation on producer services overall, with limited effects on some subsectors. Analyzing a select group of producer services subsectors revealed that no sectors followed the overall model exactly, suggesting that targeting producer services for growth must be done carefully. None of our models show employment diversity to be a factor in differentiating economic growth at the intra-metropolitan level.

Public and Private Production in a Mixed Delivery System: Regulation, Competition and Costs

Source: Germà Bel and Jordi Rosell, Journal of Policy Analysis and Management, Volume 35, Issue 3, Summer 2016
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From the abstract:
Academics and policymakers are increasingly shifting the debate concerning the best form of public service provision beyond the traditional dilemma between pure public and pure private delivery modes, because, among other reasons, there is a growing body of evidence that casts doubt on the existence of systematic cost savings from privatization, while any competition seems to be eroded over time. In this paper, we compare the relative merits of public and private delivery within a mixed delivery system. We study the role played by ownership, transaction costs, and competition on local public service delivery within the same jurisdiction. Using a stochastic cost frontier, we analyze the public-private urban bus system in the Barcelona Metropolitan Area. We find that private firms have higher delivery costs than those incurred by the public firm, especially when transaction costs are taken into account. Furthermore, tenders tend to decrease delivery costs.

Gainfully Employed? Assessing the Employment and Earnings of For-Profit College Students Using Administrative Data

Source: Stephanie Riegg Cellini & Nicholas Turner, NBER Working Paper No. 22287, Issued in May 2016

Abstract:

We draw on population-level administrative data from the U.S. Department of Education and the Internal Revenue Service to quantify the impact of for-profit college attendance on the employment and earnings of over 1.4 million students. We characterize both the within-student earnings effects and joint distributions of earnings effects and increases in student debt. Our descriptive analysis of degree-seeking students suggests that on average associate’s and bachelor’s degree students experience a decline in earnings after attendance, relative to their own earnings in years prior to attendance. Master’s degree students and students who complete their degrees appear to experience better outcomes, with positive earnings effects. Our difference-in-difference analysis of certificate students suggests that despite the much higher costs of attendance, earnings effects are smaller in the for-profit sector relative to the effects for comparable students in public community colleges—a result that holds for all but one of the top ten fields of study. In absolute terms, we find no evidence of improved earnings post-enrollment for students in any of the top ten for-profit fields and we can rule out that average effects are driven by a few low-performing institutions.