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Relational Goods, Monitoring And Non-Pecuniary Compensations In The Nonprofit Sector: The Case Of The Italian Social Services

  • Michele Mosca
  • Marco Musella
  • Francesco Pastore

This paper investigates the nonprofit wage gap suggesting a theoretical framework where, like in Akerlof (1984) , effort correlates not only with wages, but also with non-monetary compensations. These take the form of relational goods by-produced in the delivery of particular services. By paying higher non-pecuniary compensations, the nonprofit sector attracts intrinsically similarly skilled, but more motivated workers, able to provide in fact a similar (or potentially higher) level of effort than their counterparts in the forprofit sector. On an empirical ground, the paper provides a number of econometric tests that confirm the main predictions of the model in Italy's case. It adds to the available empirical literature by introducing in the analysis direct measures of non-pecuniary compensations and job satisfaction. Copyright 2007 The Authors Journal compilation � CIRIEC 2007.

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Article provided by Wiley Blackwell in its journal Annals of Public and Cooperative Economics.

Volume (Year): 78 (2007)
Issue (Month): 1 (03)
Pages: 57-86

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Handle: RePEc:bla:annpce:v:78:y:2007:i:1:p:57-86
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  1. Benedetto Gui, 2000. "Beyond Transactions: On the Interpersonal Dimension of Economic Reality," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 71(2), pages 139-169, 06.
  2. Weisbrod, Burton A, 1983. "Nonprofit and Proprietary Sector Behavior: Wage Differentials among Lawyers," Journal of Labor Economics, University of Chicago Press, vol. 1(3), pages 246-63, July.
  3. Handy, Femida & Katz, Eliakim, 1998. "The Wage Differential between Nonprofit Institutions and Corporations: Getting More by Paying Less?," Journal of Comparative Economics, Elsevier, vol. 26(2), pages 246-261, June.
  4. Goddeeris, John H, 1988. "Compensating Differentials and Self-selection: An Application to Lawyers," Journal of Political Economy, University of Chicago Press, vol. 96(2), pages 411-28, April.
  5. Preston, Anne E, 1989. "The Nonprofit Worker in a For-Profit World," Journal of Labor Economics, University of Chicago Press, vol. 7(4), pages 438-63, October.
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