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The fallacy of the Good Samaritan: Volunteering as a weird way of making money

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Abstract

This paper explores individual motives for volunteering: The analysis is based on the interpretation of volunteering as a consumption good (consumption model) or as a mean to increase individual’s own human capital (investment model). We present an econometric framework taking into account self selection into volunteering and simultaneity between the volunteering decision and the determination of income in order to test these two models and to identify the underlying motives. We find strong statistical evidence for the investment model with a highly robust and significant impact of volunteering on the wage rate. On average the wage premium as the difference in the wage rate between one person volunteering and not volunteering amounts up to 15.7 percent. Within the framework of the investment model it turns out that the number of volunteering hours plays a major role in explaining this wage premium. This supports the idea of volunteering as a mean to accumulate human capital and signalling willingness to perform. As far as the consumption model is concerned we find no convincing statistical evidence for its validity. The strong evidence for the investment model requires the consideration of voluntary activities in the estimation of wage equations. Moreover, we conclude that the existence of the wage premium is a decisive factor for people to volunteer or not and therefore reflects an important argument in the recruitment process of volunteers for several organisations.

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Bibliographic Info

Paper provided by Department of Economics, Johannes Kepler University Linz, Austria in its series Economics working papers with number 2004-15.

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Date of creation: Dec 2004
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Handle: RePEc:jku:econwp:2004_15

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Keywords: volunteering; voluntary labour supply; human capital accumulation; wage premium; altruism.;

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Citations

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Cited by:
  1. Alexander Kroll & Dominik Vogel, 2013. "Prosocial Attitudes in the Public and Private Sector: Exploring Behavioral Effects and Variation across Time," SOEPpapers on Multidisciplinary Panel Data Research 578, DIW Berlin, The German Socio-Economic Panel (SOEP).
  2. Damiano Fiorillo, 2009. "Do monetary rewards crowd out intrinsic motivations of volunteers? Some empirical evidence for Italian volunteers," Discussion Papers 3_2009, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy.
  3. Bruno, Bruna & Fiorillo, Damiano, 2014. "Voluntary work and wages," MPRA Paper 52989, University Library of Munich, Germany.
  4. Bruna Bruno & Damiano Fiorillo, 2011. "Why without pay? Intrinsic motivation in unpaid labour supply," Discussion Papers 3_2011, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy.
  5. Bruna, Bruno & Damiano, Fiorillo, 2009. "Why without Pay? The Intrinsic Motivation between Investment and Consumption in Unpaid Labour Supply," CELPE Discussion Papers 111, CELPE - Centre of Labour Economics and Economic Policy, University of Salerno, Italy.
  6. Fiorillo, Damiano, 2007. "Do monetary rewards undermine intrinsic motivations of volunteers? Some empirical evidence for Italian volunteers," MPRA Paper 7783, University Library of Munich, Germany.
  7. Benno Torgler & María A. García Valiñas & Alison Macintyre, 2008. "Environmental Participation and Environmental Motivation," Working Papers 2008.95, Fondazione Eni Enrico Mattei.
  8. Damiano Fiorillo, 2012. "Volunteer work and domain satisfactions: evidence from Italy," International Journal of Social Economics, Emerald Group Publishing, vol. 39(2), pages 97-124, January.
  9. Max Albert, 2008. "Product Quality in a Simple OLG Model of Scientific Competition," MAGKS Papers on Economics 200804, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  10. Astrid Haider & Ulrike Schneider, 2010. "The Influence Of Volunteers, Donations And Public Subsidies On The Wage Level Of Nonprofit Workers: Evidence From Austrian Matched Data," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 81(1), pages 1-20, 03.
  11. Sherman, Arie & Shavit, Tal, 2013. "The immaterial sustenance of work and leisure: A new look at the work–leisure model," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 46(C), pages 10-16.
  12. Bruno, Bruna & Fiorillo, Damiano, 2012. "Why without pay? Intrinsic motivation in the unpaid labour supply," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(5), pages 659-669.
  13. Franz Hackl & Martin Halla & Gerald J. Pruckner, 2009. "Volunteering and the State," Economics working papers 2009-01, Department of Economics, Johannes Kepler University Linz, Austria.
  14. Bruno, Bruna & Fiorillo, Damiano, 2013. "Voluntary work and labour income," MPRA Paper 43995, University Library of Munich, Germany.
  15. Paola Zappa & Emma Zavarrone, 2010. "Social interaction and volunteer satisfaction: an exploratory study in primary healthcare," International Review of Economics, Springer, vol. 57(2), pages 215-231, June.

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