Endowment for a rainy day? An empirical analysis of endowment spending by operating public charities
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Abstract There has been growing public attention to the accumulation and spending of endowments in recent years. Scholars have offered different theories on the objective of endowments that have different implications for endowment spending. Yet, there are limited empirical studies and they mostly focus on universities. Using the Form 990 data between 2009 and 2016, this study examines how endowments are actually spent for four types of operating charities, including museums, universities, hospitals, and K‐12 schools. The descriptive results show that there are considerable cross‐sectional differences in endowment characteristics across these types of organizations. The fixed effects analyses further demonstrate different types of organizations have different payout responses to changes in endowment returns, non‐endowment income, and contributions to endowment. However, the study does not find any empirical evidence that organizations use endowments as rainy day funds. This article extends the understanding on endowment spending behavior from universities to other types of operating charities that also hold endowments. The findings provide empirical evidence that may inform the existing debate on endowment spending and have practical implications for endowment management.Keywords:
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The paper assesses the sources of gender-based wage differentials and investigates the relative importance of the endowment effect, female disadvantage and male advantage in explaining gender-based wage differentials in the Cameroon labor market. Use is made of the Ordinary Least Square technique and the Oaxaca-Ransom decomposition. Oaxaca-Ransom decomposition results show that primary education, secondary education, tertiary education and professional training are sources of the gender pay gap. Our results also underline the importance of working experience, formal sector employment and urban residency in explaining wage differentials between male and female workers in the Cameroon labour market. Our findings reveal that education human capital explains a greater portion of the endowment effect and contributes little to the discrimination effect. Essentially, we observe that the discrimination effect has a worsening effect on the gender pay gap compared to the mitigating role of the endowment effect. Again, our results show that a greater part of the discrimination effect of the gender pay gap is attributed to female disadvantage in the Cameroon labor market.
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Traditional theoretical literature which neglects the benefits of stabilization policies (e.g., Lucas 1987 and 2003) ultimately relies on the small impact that macroeconomic volatility has on aggregate income and consumption. In this article, we argue that such an approach is both theoretically and empirically weak. From the theoretical viewpoint, the cost of volatility should be measured including not only monetary magnitudes, but also those psychological costs whose relevance has been stressed by behavioural economics and which are correlated with the number of unemployment episodes. We refer here to the implications for experienced utility of loss aversion, the endowment effect and hedonic adaptation. This theoretical problem is coupled with the empirical finding that the effects of downturns are not randomly distributed and serially uncorrelated, i.e., they affect more frequently those who have less (in terms of skills, income and wealth) and who suffer greater wellbeing losses from each shock. It follows that the traditional (and Lucas) analysis disregards the main causes of wellbeing losses determined by downturns. Hence, it cannot be considered as a theoretically sound basis for denying the usefulness of policies aimed at preventing downturns and/or of micro regulation policies aimed at preventing the impact of downturns and labour force reallocation on the labour market.
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We evaluate the effects of monetary and nonmonetary endowments on willingness to pay (WTP) bids in Becker–DeGroot–Marschak (BDM) experimental auctions. Results indicate that subjects provided with a monetary endowment bid more than those that received a nonmonetary endowment.
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Abstract We construct a competitive model that explains the gender pay gap per hour by a statistical discrimination mechanism based on unobserved effort provided by men and women in accordance to an intrahousehold division of labor in which only women engage in child rearing activities. For unskilled labor an additional physical endowment effect arises and increases the pay gap against women. The model explains several empirical regularities in the literature of regression analysis. We show empirical evidence for Colombia and the United States that is consistent with the predictions of the model. Further, we study an equal parental leave and equal pay for equal work policies and find conditions for these policies to be effective at reducing the pay gap.
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