Household donations of time and money in response to a health shock

Abstract

Donations play a critical role in supporting the provision of public goods, yet how donating behaviour changes in response to health shocks is poorly understood. We investigate how the household's joint decision to donate time (volunteer) and money changes following a health shock. Using data from the United States Panel Study of Income Dynamics, and a within-household design that captures the dynamics of a post-health shock response, we find no overall change in the probability of households donating money but an overall reduction in the probability of donating time following a health shock. This is driven by a significant shift from donating both money and time to donating only money after a health shock. The shift away from donating time occurs for both the individual who experienced the health shock and their spouse, though the reduction is greater for the spouse. We examine the role of labour market responses to health shocks in explaining donating behaviour and find that consistent with the added worker effect, spouses of those who experience a health shock increase their work hours, constraining their time available for volunteering.

Keywords: Charitable giving; Health shock; Household spillover effects; Volunteering.