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Working in the for-profit versus not-for-profit sector: what difference does it make? An inquiry on preferences of voluntary and involuntary movers

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  • Leonardo Becchetti
  • Stefano Castriota
  • Sara Depedri

Abstract

We investigate the drivers of the for-profit/not-for-profit wage differential by comparing judgments of job characteristics of workers who voluntarily or involuntarily moved from the former to the latter sector. We define voluntary movers as those who applied for a job in a not-for-profit organization and, when successful, resigned from a for-profit position, while involuntary movers have either been laid off by their company or resigned without already having a job offer in the not-for-profit sector. We observe that a large share of voluntary movers do not end up with higher wages but, surprisingly, do have higher job satisfaction after the change. The vast majority of voluntary movers find significantly higher time flexibility, improved relationships with stakeholders and closer conformity to educational skills in their new jobs. Our findings support the for-profit/not-for-profit compensating differential hypothesis and shed light on mechanisms that are beyond the job donation behavior of intrinsically motivated workers.

Suggested Citation

  • Leonardo Becchetti & Stefano Castriota & Sara Depedri, 2014. "Working in the for-profit versus not-for-profit sector: what difference does it make? An inquiry on preferences of voluntary and involuntary movers," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 23(4), pages 1087-1120.
    • Handle: RePEc:oup:indcch:v:23:y:2014:i:4:p:1087-1120.
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    File URL: http://hdl.handle.net/10.1093/icc/dtt044
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    Cited by:

    1. Benoit Dostie & Mohsen Javdani, 2020. "Not for the Profit, But for the Training? Gender Differences in Training in the For‐Profit and Non‐Profit Sectors," British Journal of Industrial Relations, London School of Economics, vol. 58(3), pages 644-689, September.
    2. Barbetta Gian Paolo & Canino Paolo & Cima Stefano & Verrecchia Flavio, 2018. "Entry and Exit of Nonprofit Organizations: National, Sectorial, and Geographic Trends with Italian Census Data," Nonprofit Policy Forum, De Gruyter, vol. 9(2), pages 1-12, June.

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