On the Economics of Volunteering

The past decade has witnessed a surge in private, volunteer activity across the globe, generating an optimistic belief in the potential of “civil society” in “filling” the niches where both the state and markets have failed. While this has stirred a burgeoning academic interest in the third sector, with a proliferation of studies from the perspective of political science, sociology, and social politics, economic interest has been rather lackluster. Economic theories that may enrich our understanding of volunteering behavior have either not received adequate attention or have not been explicitly identified. Furthermore, the significant contribution made by volunteer labor goes unnoticed in economic terms, as national income and labor force statistics are designed to gather information primarily on “remunerated” economic activity. Recognizing this lacuna, this paper attempts to develop a conceptual framework to measure the economic contribution made by volunteer labor, thereby hoping to raise its societal appreciation. To do so, we make forays in the following directions: (1) capture the theoretical underpinnings on the economics of volunteering; (2) incorporate that in developing a suitable methodological framework to accord an “economic value” to volunteer labor; (3) use relevant data sources to generate, some initial, but understandably rough estimates to comprehend its contribution to national output and employment. Our results indicate that volunteering is a substantial activity in most developed countries, and is growing in importance in many developing countries. Sound economic analyses applied to good descriptive cross-country data on volunteering could shed light on many fundamental issues: Why has voluntarism flourished in some societies, yet languished in others? Does it play inherently different roles in the “North” vis-a-vis the “South”? And, most importantly, how does the level of development affect voluntarism, i.e. is it rising or declining with development?