This dissertation studies highway construction in the United States in the interwar years and payments in lieu of taxes (PILOTs) that charitable nonprofit organizations pay to local governments.
The first chapter studies the impacts of Federal-Aid Highways on the evolution of retail trade in the 1920s. In the Roaring 20s, the U.S. federal government strongly encouraged state highway construction with its Federal-Aid Highway program, as a result of which state highway spending increased dramatically. The same decade saw a 36 percent decline in general stores. I offer causal evidence that these two developments were related: that increasing highway spending by 10 percent would reduce the number of general stores by 30 percent. My results speak to the decline of rural trade center during the early twentieth century and show one of the many ways that highway construction in the Interwar years literally and figuratively altered the landscape of the American economy.
The second chapter studies the impact of Federal-Aid Highways on improvements in education in U.S. South. I find that more spending on Federal Highways is associated higher per student spending in white schools, longer school year in black schools, and a widening per student spending gap between white and black schools. The spatial distribution of highway spending matches well with that of the Rosenwald school program. The evidence is consistent with the hypothesis that highway expenditure attracted external investments (in this case philanthropic investment in education), which improved educational outcomes.
The third chapter studies the determinants and the effects of payments in lieu of taxes (PILOTs). U.S. cities and towns increasingly request that nonprofits make payments in lieu of taxes (known as PILOTs). Strictly speaking, PILOTs are voluntary, though nonprofits may feel pressure to make them, particularly in high-tax communities. Evidence from Massachusetts indicates that PILOT rates, measured as ratios of payments to the value of local tax-exempt property, are higher in towns with higher property tax rates. Moreover, PILOTs appear to discourage nonprofit activity, especially their real property holdings. These patterns are consistent with voluntary PILOTs acting in a manner similar to low-rate, compulsory real estate taxes.PHDEconomicsUniversity of Michigan, Horace H. Rackham School of Graduate Studieshttp://deepblue.lib.umich.edu/bitstream/2027.42/135822/1/econfan_1.pd
