Working Paper: NBER ID: w23159
Authors: Daniel M. Hungerman; Kevin J. Rinz; Jay Frymark
Abstract: 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.
Keywords: school vouchers; church finances; Catholic parishes; voucher programs; religious organizations
JEL Codes: H4; I2; Z12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| voucher programs (I22) | church finances (I22) |
| voucher expansion (Y60) | church donations (Z12) |
| voucher expansion (Y60) | spending on non-educational religious purposes (Z12) |
| voucher programs (I22) | revenue from worshippers (Z12) |
| voucher expansion (Y60) | parish closures (Z12) |