Daniel M. Hungerman, Kevin Rinz, and Jay Frymark (forthcoming). “Beyond the Classroom: The Implications of School Vouchers for Church Finances.”Review of Economics and Statistics.
Governments have used vouchers to spend billions of dollars on private education; much of this spending has gone to religiously-affiliated schools. We explore the possibility that vouchers could create a financial windfall for religious organizations operating private schools and in doing so impact the spiritual, moral, and social fabric of communities. We use a dataset of Catholic-parish finances from Milwaukee that includes information on both Catholic schools and the parishes that run them. We show that vouchers are now a dominant source of funding for many churches; parishes in our sample running voucher-accepting schools get more revenue from vouchers than from worshipers. We also find that voucher expansion prevents church closures and mergers. Despite these results, we fail to find evidence that vouchers promote religious behavior: voucher expansion causes significant declines in church donations and church spending on non-educational religious purposes. The meteoric growth of vouchers appears to offer financial stability for congregations while at the same time diminishing their religious activities.
Daniel M. Hungerman, Kevin Rinz, Tim Weninger, and Chungeun Yoon (2018). “Political Campaigns and Church Contributions.”Journal of Economic Behavior and Organization.
We combine a new dataset of weekly Catholic church donations with a new dataset of presidential-election campaign stops to explore the impact of stops on donations. We find that stops increase donations, with a campaign stop generating 2 percent more donations in the following week. Our results suggest that this effect is of short duration. Further, it does not appear to vary based on the political language used by the parish in its own church bulletins. However, the effect does appear to vary based on the religiosity of the candidates themselves, with Catholic candidates generating the largest increases.
Daniel M. Hungerman and Kevin Rinz (2016). “Where Does Voucher Funding Go? How Large-scale Subsidy Programs Affect Private-school Revenue, Enrollment, and Prices.”Journal of Public Economics 136, 62-85.
Using a new dataset constructed from nonprofit tax-returns, this paper explores how vouchers and other large- scale programs subsidizing private school attendance have affected the fiscal outcomes of private schools and the affordability of a private education. We find that subsidy programs created a large transfer of public funding to private schools, suggesting that every dollar of funding increased revenue by a dollar or more. Turning to the incidence of subsidies and the impact of subsidies on enrollment, our findings depend on the type of program introduced: programs that restrict eligibility to certain groups of students create large enrollment gains but no change in price, while programs that offer unrestricted subsidies lead to price increases but no change in enrollment. We calculate elasticities of demand and supply for private schools, and discuss welfare effects.
“Labor Market Concentration, Earnings Inequality, and Earnings Mobility”
Using data from the Longitudinal Business Database and Form W-2, I document trends in local industrial concentration from 1976 through 2015 and estimate the effects of that concentration on earnings outcomes within and across demographic groups. Local industrial concentration has generally been declining throughout its distribution over that period, unlike national industrial concentration, which declined sharply in the early 1980s before increasing steadily to nearly its original level beginning around 1990. Estimates indicate that increased local concentration reduces earnings and increases inequality, but observed changes in concentration have been in the opposite direction, and the magnitude of these effects has been modest relative to broader trends; back-of-the-envelope calculations suggest that the 90/10 earnings ratio was about six percent lower and earnings were about one percent higher in 2015 than they would have been if local concentration were at its 1976 level. Within demographic subgroups, most experience mean earnings reductions and all experience increases in inequality. Estimates of the effects of concentration on earnings mobility are sensitive to specification.
“The Distributional Effects of Minimum Wages: Evidence from Linked Survey and Administrative Data” (with John Voorheis)
States and localities are increasingly experimenting with higher minimum wages in response to rising income inequality and stagnant economic mobility, but commonly used public datasets offer limited opportunities to evaluate the extent to which such changes affect earnings growth. We use administrative earnings data from the Social Security Administration linked to the Current Population Survey to overcome important limitations of public data and estimate effects of the minimum wage on growth incidence curves and income mobility profiles, providing insight into how cross-sectional effects of the minimum wage on earnings persist over time. Under both approaches, we find that raising the minimum wage increases earnings growth at the bottom of the distribution, and those effects persist and indeed grow in magnitude over several years. This finding is robust to a variety of specifications, including alternatives commonly used in the literature on employment effects of the minimum wage. Instrumental variables and subsample analyses indicate that geographic mobility likely contributes to the effects we identify. Extrapolating from our estimates suggests that a minimum wage increase comparable in magnitude to the increase experienced in Seattle between 2013 and 2016 would have blunted some, but not nearly all, of the worst income losses suffered at the bottom of the income distribution during the Great Recession.
“Labor Market Effects of the Affordable Care Act: Evidence from a Tax Notch” (with Kavan Kucko and Ben Solow)
States that declined to raise their Medicaid income eligibility cutoffs to 138 percent of the federal poverty level (FPL) under the Affordable Care Act (ACA) created a “coverage gap” between their existing, often much lower Medicaid eligibility cutoffs and the FPL, the lowest level of income at which the ACA provides refundable, advanceable “premium tax credits” to subsidize the purchase of private insurance. Lacking access to any form of subsidized health insurance, residents of those states with income in that range face a strong incentive, in the form of a large upward notch in post-tax income at the FPL, to increase their earnings and obtain the premium tax credit. We investigate the extent to which they respond to that incentive. Using the universe of tax returns, we document bunching in the income distribution surrounding this notch. Consistent with Saez (2010), we find that bunching occurs only among filers with self-employment income. Specifically, filers without children and married filers with two or three children consistently exhibit significant bunching. Analysis of tax data linked to labor supply measures from the American Community Survey, however, suggests that this bunching likely reflects a change in reported income rather than a change in true labor supply. We find no evidence that wage and salary workers adjust their labor supply in response to increased availability of directly-purchased health insurance.
“Undone by the Market? The Effects of School Vouchers on Educational Inputs”
By altering the market for private schooling, large-scale school voucher programs may have effects on the educational experience of private school students beyond the effects of small-scale programs. Using eight large, state-level, voucher-style programs adopted between the late 1990s and mid-2000s and a unique dataset on school expenditures and teacher compensation, I estimate the effects of vouchers on educational inputs experienced by students in private school. Large-scale, voucher-style programs alter the inputs students experience in ways that tend to worsen the experience of black students while improving the experience of white students. These effects are driven by changes in inputs deployed at newly established schools. Back-of-the-envelope calculations indicate that the market effects of vouchers are large enough to substantially reduce the benefits of moving from public to private school for black students, reversing more than 100 percent of the gains in student-teacher ratio, 87 percent of the gain in per-teacher compensation, and 51 percent of the gain in instructional hours. My estimates suggest that extrapolation from prior studies may be inappropriate when considering how larger programs affect students.
Heterogeneous effects of trade shocks on migration (with Abigail Wozniak)
“The Effects of Right to Work Laws on Wages: Evidence from the Taft-Hartley Act of 1947”
This paper uses the details of an historical setting in which the introduction of “right to work” laws was arguably exogenous – the period following the passage of the Taft-Hartley Act in 1947 – to produce credibly identified estimates of the effects of these laws on wages. The average effect of right to work laws on wages across all sectors of the economy is likely small and slightly negative. Some evidence indicates wage effects are more negative within the highly unionized sector.