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Nonprofit wages: theory and evidence

In: Handbook of Research on Nonprofit Economics and Management

Author

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  • Barry T. Hirsch
  • David A. Macpherson
  • Anne E. Preston

Abstract

The nonprofit sector’s share of wage and salary employment in the US has increased over time, from about 5.5 percent in the mid-1990s to 7 percent in 2015. This chapter surveys the literature and presents new evidence on the employment and earnings of workers in the nonprofit sector since 1994. As compared to the private for-profit sector, nonprofits have a more educated and older workforce, with employment concentrated in health, education, and service occupations and industries. Standard wage level analysis indicates lower wages for men employed in nonprofits compared with male for-profit workers with similar measured attributes. No such penalty is found for women. Based on panel estimates of wage changes, we find no substantive wage penalties for either women or men moving between jobs in and outside the nonprofit sector. We conclude that wages in the nonprofit and for-profit sectors, on average, differ little for similar workers and jobs.

Suggested Citation

  • Barry T. Hirsch & David A. Macpherson & Anne E. Preston, 2018. "Nonprofit wages: theory and evidence," Chapters, in: Bruce A. Seaman & Dennis R. Young (ed.), Handbook of Research on Nonprofit Economics and Management, chapter 8, pages 146-179, Edward Elgar Publishing.
    • Handle: RePEc:elg:eechap:16909_8
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    Cited by:

    1. Bauer, Kevin & Kosfeld, Michael & von Siemens, Ferdinand A., 2025. "Incentives, self-selection, and coordination of motivated agents for the production of social goods," Games and Economic Behavior, Elsevier, vol. 152(C), pages 276-292.

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    Keywords

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    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out

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