Private Aid and Development: Evidence from Million Dollar Donations

This paper investigates the role of private aid in meeting global challenges in developing countries in the 21st century. We use a newly available data set that provides unique information about publicly announced private donations of a million dollars or more between 2000 and 2010 from U.S. individuals, foundations, and corporations to international causes. In the past decade, there has been a significant growth in private aid; however, only a handful of studies have examined the size and composition of private aid to developing countries. Our analysis reveals that private aid toward developing countries is focused on key subsectors, with a significant share of private aid targeted at health and education. In general, we find that private aid to developing countries is positively associated with population size, incidence, and the severity of natural disasters, with more populous countries and countries that experienced more severe disasters receiving more private aid. Interestingly, while aggregate incidence and levels of private aid are positively associated with disasters, private aid is less responsive to development indicators and other factors that have been shown to be of importance for official development assistance (ODA)

Charitable Giving During the COVID-19 Pandemic

My written testimony will focus on addressing three crucial questions: 1) What are the current trends in charitable giving during the COVID-19 pandemic 2) How should these trends be interpreted in light of overall charitable giving patterns? 3) What are the policies that can strengthen charitable giving by American households now and in the future

Prospects for immigrant-native wealth assimilation: evidence from financial market participation

Because financial transactions are important for wealth accumulation, and rely on trust and confidence in institutions, the financial market behavior of immigrants can provide important insights into the assimilation process. Compared to the native-born, immigrants are less likely to own savings and checking accounts and these differences tend to persist over time. Our results suggest that a large share of the immigrant-native gap in financial market participation is driven by group differences in education, income, and geographic location. For a given immigrant, the likelihood of financial market participation decreases with higher levels of ethnic concentration in the metropolitan area.Financial institutions ; Immigrants ; Wealth

What can we learn about financial access from U.S. immigrants?

We find that wealthier and more educated immigrants are more likely to make use of basic banking services and other formal financial services. Holding these (and other) factors constant, we find immigrants from countries with more effective institutions are more likely to have a relationship with a bank and use formal financial markets more extensively. Institutional quality appears to be an important factor in both determining both the breadth and the depth of financial access. It can explain approximately 17 percent of the country-of- origin-level variation in bank account usage among immigrants in the U.S., after other characteristics, including wealth, education and income, are controlled for. Institutional quality is even more important for explaining more extensive participation in financial markets, accounting for 27 percent of the analogous variation. We examine various measures of institutional effectiveness and are careful to control for unobserved individual characteristics, including specifications with country fixed-effects.Immigrants ; Financial institutions ; Payment systems

Institutional quality and financial market development: evidence from international migrants in the U.S.

A growing body of theoretical and empirical work identifies the ability of a country’s institutions to protect private property and provide incentives for investment as a key explanation for the persistent disparity in financial market development. We add to this literature by analyzing the impact of institutions on financial development using data on the financial decisions of immigrants and the native-born in the U.S. While all of the individuals whose decisions we analyze face the same formal institutional framework in the U.S., immigrants bring with them varied experiences with institutions in their home countries. We find that immigrants who come from countries with institutions that are more effective at protecting property rights are more likely to participate in U.S. financial markets. ; The effect of home country institutions is very persistent and impacts immigrants for the first 25 years that they spend in the U.S. Evidence from variation in the effect of home country institutions by age at migration, suggests that individuals appear to learn about home country institutions before the age of sixteen, probably in the home and potentially at school, rather than through direct experience. These findings are robust to alternative measures of institutional effectiveness and to various methods of controlling for unobserved individual characteristics.Immigrants ; Financial markets

Bank crises and investor confidence

In addition to their direct effects, episodes of financial instability may decrease investor confidence. Measuring the impact of a crisis on investor confidence is complicated by the fact that it is difficult to disentangle the effect of investor confidence from coincident direct effects of the crisis. In order to isolate the effects of financial crises on investor confidence, we study the investment behavior of immigrants in the U.S. Our findings indicate that systemic banking crises have important effects on investor behavior. Immigrants who have experienced a banking crisis in their countries of origin are significantly less likely to have bank accounts in the U.S. This finding is robust to including important individual controls like wealth, education, income, and age. In addition, the effect of crises is robust to controlling for a variety of country of origin characteristics, including measures of financial and economic development and specifications with country of origin fixed effects.Financial crises

Beyond Grantmaking An Investigation of Program-Related Investments by U.S. Foundations

This study investigates program-related investments (PRIs), which are mechanisms that foundations can use to achieve charitable purposes while generating moderate financial returns. There is a growing interest in PRIs and other similar market-based approaches among practitioners of philanthropy recently. We examine the internal and external factors that influence PRIs by U.S. foundations through both quantitative and qualitative analyses. By analyzing the Internal Revenue Service (IRS) and Foundation Center data, we find that foundations with more financial and human resources are more likely to adopt PRIs initially and also more intensively engage in PRIs. Foundations of 25 years or older invest less money in PRIs than younger foundations. Findings from the interviews with eight foundations reveal additional factors influencing foundations’ PRI activities, including staffing and expertise, the board and executive leadership, changes in the legal and economic environment, sectoral trends and peer networks, and the interests and needs of PRI recipients

Does Female Schooling Reduce Fertility? Evidence from Nigeria

The literature generally points to a negative relationship between female education and fertility. Citing this pattern, policymakers have advocated educating girls and young women as a means to reduce population growth and foster sustained economic and social welfare in developing countries. This paper tests whether the relationship between fertility and education is indeed causal by investigating the introduction of universal primary education in Nigeria. Exploiting differences by region and age, the paper uses differences-in-differences and instrumental variables to estimate the role of education in fertility. The analysis suggests that increasing education by one year reduces fertility by 0.26 births.

Women Give 2013

Women Give 2013, New Research on Charitable Giving by Girls and Boys, offers empirically based evidence to guide parents on their journeys to raise charitable children. Discussions about how parents can raise charitable children increase interest in philanthropy. Learning to care about others, developing helping behaviors, and volunteering encourage empathy and a sense of responsibility for others. Philanthropy helps children and adults develop a broader sense of the world and their place in it

Ethnic Diversity and Charitable Giving

Recent studies suggest that greater community heterogeneity will lead to lower provision of local public goods and less support for governmental income distribution programs towards the needy (Luttmer 2001). Our study analyzes how private donations to charitable organizations that help the needy are affected by greater community heterogeneity. It is important to address this question since charitable organizations are often considered to provide services that are substitutes to provisions from the government. We find that greater ethnic heterogeneity decreases both the probability and the amount an individual contributes to a charitable organization using new data from Panel Study of Income Dynamics (PSID)