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The Effects of Property Rights on Labor Costs of Nonprofit Firms: An Application to the Day Care Industry

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  • Preston, Anne E

Abstract

This paper estimates differences in labor costs between nonprofit and for-profit firms in the day-care industry. A theoretical model, which draws on the property-rights literature as well as recent theo ries of nonprofit labor markets, predicts that the magnitude and sign of the nonprofit salary differential will depend on specific characteristics of the samples analyzed. Empirical results reveal that in th e most competitive segment of the day care industry the nonprofit salary differential is insignificant. However, in the less-competitive, government-subsidized segment of the industry the nonprofit different ial is significantly positive: it ranges from 5 percent to 10 percent. Copyright 1988 by Blackwell Publishing Ltd.

Suggested Citation

  • Preston, Anne E, 1988. "The Effects of Property Rights on Labor Costs of Nonprofit Firms: An Application to the Day Care Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 36(3), pages 337-350, March.
  • Handle: RePEc:bla:jindec:v:36:y:1988:i:3:p:337-50
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    Cited by:

    1. F. Barigozzi & N. Burani, 2016. "Competition Between For-Profit and Non-Profit Firms: Incentives, Workers’ Self-Selection, and Wage Differentials," Working Papers wp1072, Dipartimento Scienze Economiche, Universita' di Bologna.
    2. Laura Nirello & Lionel Prouteau, 2015. "Quels écarts de rémunérations entre salariés associatifs et salariés du secteur privé ?," Working Papers hal-01178214, HAL.
    3. Newton, Ashley N., 2015. "Executive compensation, organizational performance, and governance quality in the absence of owners," Journal of Corporate Finance, Elsevier, vol. 30(C), pages 195-222.
    4. Federica VIGANO & Andrea SALUSTRI, 2015. "Matching profit and Non-profit Needs: How NPOs and Cooperative Contribute to Growth in Time of Crisis. A Quantitative Approach," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 86(1), pages 157-178, March.
    5. DeVaro, Jed & Maxwell, Nan & Morita, Hodaka, 2016. "Compensation and Intrinsic Motivation in Nonprofit and For-Profit Organizations," CEI Working Paper Series 2015-10, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    6. Noguchi, Haruko & Shimizutani, Satoshi, 2007. "Nonprofit/for-profit status and earning differentials in the Japanese at-home elderly care industry: Evidence from micro-level data on home helpers and staff nurses," Journal of the Japanese and International Economies, Elsevier, vol. 21(1), pages 106-120, March.
    7. Duncan, Brian, 1999. "Modeling charitable contributions of time and money," Journal of Public Economics, Elsevier, vol. 72(2), pages 213-242, May.
    8. Benjamin Bittschi & Astrid Pennerstorfer & Ulrike Schneider, 2015. "Paid and Unpaid Labour in Non-Profit Organizations: Does the Substitution Effect Exist?," British Journal of Industrial Relations, London School of Economics, vol. 53(4), pages 789-815, December.
    9. Jones, Daniel B., 2015. "The supply and demand of motivated labor: When should we expect to see nonprofit wage gaps?," Labour Economics, Elsevier, vol. 32(C), pages 1-14.
    10. H. Naci Mocan, 1995. "The Child Care Industry: Cost Functions, Efficiency, and Quality," NBER Working Papers 5293, National Bureau of Economic Research, Inc.
    11. Hirsch, Barry & Macpherson, David A. & Preston, Anne E., 2017. "Nonprofit Wages: Theory and Evidence," IZA Discussion Papers 10571, Institute for the Study of Labor (IZA).
    12. Anup Malani & Tomas Philipson & Guy David, 2003. "Theories of Firm Behavior in the Nonprofit Sector. A Synthesis and Empirical Evaluation," NBER Chapters,in: The Governance of Not-for-Profit Organizations, pages 181-216 National Bureau of Economic Research, Inc.
    13. Jed DeVaro & Dana Samuelson, 2005. "Why Are Promotions Less Likely in Nonprofit Firms?," Labor and Demography 0501010, EconWPA.
    14. Astrid SIMILON, 2015. "Self-Regulation Systems for NPO Coordination: Strenghts and Weaknesses of Label and Umbrella Mechanisms," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 86(1), pages 89-104, March.
    15. 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, March.
    16. Christopher J. Ruhm & Carey Borkoski, 2003. "Compensation in the Nonprofit Sector," Journal of Human Resources, University of Wisconsin Press, vol. 38(4).
    17. Astrid Pennerstorfer & Ulrike Schneider, 2010. "What Determines the (Internal) Wage Distribution in Non-Profit Organizations?," Kyklos, Wiley Blackwell, vol. 63(4), pages 580-596, November.
    18. Leonardo Becchetti & Stefano Castriota & Ermanno Tortia, 2013. "Productivity, wages and intrinsic motivations," Small Business Economics, Springer, vol. 41(2), pages 379-399, August.
    19. repec:bla:indres:v:56:y:2017:i:3:p:411-426 is not listed on IDEAS
    20. Rosemarie Emanuele & Walter O. Simmons, 2002. "More Than Altruism: What Does the Cost of Fringe Benefits Say about the Increasing Role," American Journal of Business, Emerald Group Publishing, vol. 17(2), pages 31-36.
    21. Joëlle Noailly & Sabine Visser & Paul Grout, 2007. "The impact of market forces on the provision of childcare: Insights from the 2005 Childcare Act in the Netherlands," CPB Memorandum 176, CPB Netherlands Bureau for Economic Policy Analysis.
    22. Leete, Laura, 2001. "Whither the Nonprofit Wage Differential? Estimates from the 1990 Census," Journal of Labor Economics, University of Chicago Press, vol. 19(1), pages 136-170, January.
    23. Burton A. Weisbrod, 1997. "The future of the nonprofit sector: Its entwining with private enterprise and government," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 16(4), pages 541-555.

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