Links between Income Inequality, Charitable Giving, and Social Public Spending in the U.S. and Europe

Other External Scholars:
Camille Landais, University of California, Berkeley
Project Date:
May 2008
Award Amount:
$33,500
Project Programs:
Social, Political, and Economic Inequality

In the past several decades, levels of income inequality in the United States have soared. Despite unprecedented disparities of wealth, government spending on social programs has nonetheless remained remarkably low. At the same time, private charitable contributions have surged. As a result, the United States is now exceptional in two strikingly different ways: it is the developed nation with the greatest share of private contributions but also the highest level of income inequality.

 

Until now, researchers have found it difficult to disentangle the links between inequality and public versus private spending. Economist Camille Landais, however, will construct a new, long-term (1922-2006) dataset with comprehensive statistics on income, charitable giving, and public spending in the United States. With an award from Russell Sage Foundation, Landais will use this new dataset as a tool to understand how income concentration and social spending affect charitable behavior. The dataset will also provide long-term comparative evidence of international levels of private philanthropy, public spending, and inequalities in France, Germany, the United Kingdom, and the United States.

 

The innovative new dataset will allow researchers to surmount many of the empirical obstacles faced previously. Landais will make use of tax data on income and charitable contributions since 1913, provided by the U.S. Internal Revenue Service. The dataset will integrate tables on income and contributions for every state, which will be invaluable, because it will allow researchers to look at the effect of different state inequality levels on people with the same level of income. Therefore, the effects of aggregate levels of inequality and the individual “income effect” (more wealthy individuals donating) can be disentangled. The state and long-term data will also allow investigators to exploit variations over time and across states in public spending levels. The uniquely American model of public and private redistribution raises a series of empirical questions, with crucial implications for public policy initiatives at home and abroad. Landais’ study promises to advance a theoretical understanding of economic altruism as well as a practical understanding of cross-national differences in public policy outcomes. The dataset will be downloadable and easily accessible to researchers.

 

Reports and Publications 

  • Access datasets and slides here

 

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